Global Governance and the Bretton Woods System

Abstract

The issue of global governance has received growing attention, particularly since the 1990s. This has occurred for a number of reasons. The end of the Cold War meant that increased expectations fell on international organizations in general and on the United Nations in particular. Accelerated globalization stimulated discussions about the relationship between trends in the world economy and the institutional frameworks through which it is supposedly regulated. And there has been a general recognition that a growing number of worldwide problems are beyond the capacity of individual states to solve on their own. However, hovering somewhere between a Westphalian world of sovereign states and the fanciful idea of world government, global governance is profoundly difficult to analyze and assess. How is global governance best understood? Does it actually exist, or is global governance merely an aspiration? The arena in which global governance is most advanced is nevertheless the field of economic policy-making. This stems from the 1944 Bretton Woods agreement, which sought to establish the architecture for the postwar international economic order by creating three new bodies: the IMF, the World Bank and GATT (later replaced by the World Trade Organization), collectively known as ‘the Bretton Woods system’. This system, however, has evolved significantly over time, as it has adapted to the changing pressures generated by the world economy.