Bretton Woods Institutions Research Articles

The proliferation of informal sector activities in Congo: Case of the city of Brazzaville

The underground of the countries of Africa south of the Sahara is full of enormous potentialities and raw materials of all kinds. But the population of Africa in general and of Africa south of the Sahara, in particular, remains the poorest in the world. A contrast which can be justified by the political and economic instability, the corollary of which is poor management, the drop in the standard of living. The economic potential of these countries does not reflect the level of populations that generally languish in enormous poverty without real livelihoods. Beginning in the 1980s, a large-scale economic crisis shook virtually all African countries because of the stringent restrictions and measures imposed by the Bretton Woods institutions, notably the International Monetary Fund and the World Bank. In order to cope with the increasingly difficult living conditions, the populations of which were the main victims, that is to say, the populations will gradually organize themselves and several activities will emerge. These activities are part of the informal sector. It is, therefore, a sector that brings together unemployed people looking for employment and societal well-being who organize themselves to face everyday problems. This means that it is a lucrative sector that is constantly absorbing unemployment in Congo in general and Brazzaville in particular.

Chinese Multilateralism in the AIIB

The Asian Infrastructure Investment Bank (AIIB, or the Bank) marks the first endeavor of Asian developing countries as initiators, with China at the center, in multilateral development financing. The glamour of the AIIB lies in multilateralism—the underlying principle based on which it is institutionalized. Chinese multilateralism for the AIIB is different from American multilateralism, which is embedded in the Bretton Woods institutions and has enabled the USA as a hegemon to strengthen its leadership in the world economy. China is not a hegemon; and most importantly, it has no will to counter the existing world order through the establishment of the AIIB. Rather, the Bank has positioned itself in a complementary role in international development financing. Meanwhile, Chinese multilateralism aims to improve global governance, tilting toward balance in favor of those underrepresented. The AIIB meets both the needs of China’s domestic reforms, and the world’s expectation of a responsible stakeholder and contributor. It fulfills multilateralism in both its constitutional charter and standards.

Friendly Competition for Co-Progressive Development: The Asian Infrastructure Investment Bank vs. the Bretton Woods Institutions

The AIIB is the first major multilateral development bank in a generation and the first multinational institution initiated by China to support regional economic growth and inject new impetus to global governance reform. From the beginning, the AIIB must seek ways to set itself apart from the establishment as represented by the BWIs. This article proposes that the new AIIB break with conventional wisdom and the business as usual of the BWIs and adopt the concept of co-progressiveness for international development. Co-progressive development entails a normative principle that puts self-initiation and external inducement as a means of promoting self-initiated action at the center of international development agendas and programs. As a more proactive and effective system of international development is urgently needed, this article argues that the AIIB and the BWIs should engage in a friendly competition in which players compete for a common goal. Within the AIIB, development strategies, models, policies, as well as expertise and knowledge originating from such developing countries as emerging economies should be given equal or even prioritized consideration, as emerging economies have faced similar challenges and succeeded with innovative solutions. In doing so, the AIIB can lend legitimacy to its international foray, while the global development agenda will be advanced more effectively.

Guatemala, Estados Unidos y las ONGs: La desarticulación del Estado y el rol de la asistencia

<p>En el marco de la Guerra Fría, la asistencia técnica y económica fue utilizada por el gobierno y el sector privado estadounidense (y por los organismos instituidos en Bretton Woods) como una estrategia de expansión de mercados y como herramienta capaz de reforzar la alineación de los Estados periféricos con respecto al bloque Occidental. En el caso de Guatemala, esta asistencia constituyó el eje para la “reconstrucción” del gobierno luego del derrocamiento de Arbenz en 1954, en detrimento de las reformas implementadas por los “gobiernos revolucionarios”. Luego de los Acuerdos de Paz, en el marco de la neoliberalización de la región, la asistencia adquiere vigor en la nueva reconstrucción de las instituciones guatemaltecas. Muchas de las necesidades que debiera cubrir el Estado, han intentado ser cubiertas por ayuda para el desarrollo por parte de gobiernos extranjeros, empresas y ONGS, mientras el Estado parece haberse reforzado (una vez más) en materia de seguridad ¿Qué intereses hay detrás de esta asistencia y qué dinámicas tiende a reproducir/cuestionar dentro de la lógica del mercado? ¿Cómo se plantea la relación entre ONGS en Guatemala y la red global de poder reforzada por el neoliberalismo?¿En qué medida la “ayuda para el desarrollo” se vincula a la asistencia militar?</p>

An Exploration of the Effects of Structural Adjustment and BRICS Engagement on Development in Zimbabwe Over the Periods 1991–1995 and 2009–2013

ABSTRACTThere are new avenues for development assistance emerging within the twenty-first century. Such prospects have in some cases liberated or increased the ability of African developing economies from the crippling debt associated with more traditional forms of conditional donor aid. As such, the structural adjustment programmes furthered by the Washington Consensus are rapidly losing ground within sub-Saharan Africa. Nations such as Zimbabwe who have often been criticised by Bretton Woods institutions and have had sanctions placed against them by the said institutions. Through comparing these interactions in two distinct time periods (1991–1995 and 2009–2013), the paper shows that the emergent intensified engagement with BRICS has in fact produced more desirable effects, such as growing industry, an improved health care system and better fiscal management. Given the findings mentioned above, the emergence of BRICS intensified engagement poses a threat to neo-liberal imperialism.

Causal Analyses of Public Debt and Structural Adjustment

The impact of structural adjustment program on the economic situation in many African countries can not be overemphasised. Over two decades of implementing neo-liberal economic policies by the Bretton Woods institution, it is of great importance to document the lessons learnt. This paper elicits the structural mechanism representing the intended effect of structural adjustment policies and the unintended effects observed from the implementation of the structural adjustment policies. The assumptions and hypotheses implicit in the main structural adjustment policies, as well as the observed unintended effect of the policies are clearly elicited with a causal loop diagram.

Rethinking Sovereign Debt: Pleading for Human Rights, the Rule of Law, and Economic Sense

Abstract Reviewing and commenting on Lienau’s book Rethinking Sovereign Debt, Politics, Reputation, and Legitimacy, this paper agrees with most of her points, aiming at supporting and complementing rather than contradicting her line of argument. It wants to corroborate her points as well as to bring up aspects that the book does not discuss. It presents two main comments on the more civilized treatment of sovereign debtors before WWII, and on the role of the Bretton Woods Institutions after 1945 that – as Lienau correctly notes – changed the positon of debtors fundamentally. The paper shows that going further back into history than the book did, namely sovereign debts in the nineteenth century, strongly corroborates Lienau’s line of argument regarding the period before WWII. The paper complements the role of the Bretton Woods Institutions with further facts, arguing that their strongly statist view is also self-serving and helpful to support multilateral lending practices violating these institutions’ statutes. Finally, the new tendency back to a non-statist regime she rightly observes is commented on, pointing out that present debt management in the eurozone constitutes a considerable backlash.

Global Economic Governance in the Wake of the Asian Infrastructure Investment Bank: Is China Remaking Bretton Woods?

Abstract This article examines China’s participation in the trade, monetary and development assistance fields and concludes that China’s rise does not undermine the centrality of the Bretton Woods institutions or Word Trade Organization (WTO) in global economic governance. Whereas China’s participation in the WTO presents some challenges to the long dominance of the United States and the European Union, it reaffirms the central role of the WTO. China’s monetary strategy also indicates the continuing importance of the International Monetary Fund (IMF) in the international monetary regime. Whereas the Asian Infrastructure Investment Bank (AIIB) introduces some competition to the World Bank and the Asian Development Bank (ADB), China’s efforts in establishing new multilateral development banks are mainly driven by its frustration with stalled reforms of the Bretton Woods institutions. By and large, China’s economic emergence does not challenge, but reaffirms, the post-World War II global economic architecture.

The IMF, its mandate and influence in prevention of financial sector abuse

Purpose The purpose of this paper is to articulate the mandate of the International Monetary Fund (IMF) not least in promoting a sound legal regulatory environment for markets to operate globally and its inherent challenges. While acknowledging the plausible work done by the IMF in supporting countries to achieve their macro-economic stability, the paper articulates some of its shortcomings as a global institution. It is evident that the post-war climate in which the World Bank and IMF were created has drastically changed – which presupposes that these institutions now need to reposition themselves to reflect on contemporary global challenges accordingly. The author has argued in the past that a robust regulatory system should be devised taking into account the dynamic challenges in the market environment but also to prevent them from happening again. Design/methodology/approach The paper has utilized empirical evidence to evaluate the mandate of the IMF in addressing its dynamic challenges such as the global financial and debt crises in Europe and the USA and prevention of financial sector abuse globally. The IMF is one of the Bretton Woods Institutions charged with the oversight responsibility to enforce policies and enable countries to manage their macro-economic challenges efficiently. Findings The findings demonstrate that the IMF is as relevant and important as it was when it was created in 1945. However, there is a need for intrinsic and structural changes within this institution to continue discharging its mandate in a changed global regulatory landscape. The IMF is still crucial in fostering a fundamental stabilization function to fragile global economies in areas of financial and technical assistance, and developing requisite legal and supervisory infrastructure within fledging member countries. Research limitations/implications The paper was written by analysis of both theoretical and empirical data largely based on secondary data sources. It would have been better to first present the findings in an international conference to solicit wide views and internalize them accordingly. Practical implications While acknowledging the plausible work done by the IMF and its counterpart the World Bank in facilitating global financial markets regulation and prevention of financial sector abuse, as oversight institutions, they need to constantly review their mandate to respond robustly to their dynamic challenges such as the global and debt crises and financial sector abuse. Oversight institutions need to constantly review and adapt their mandate accordingly, if they are to discharge their varied responsibilities efficiently. They cannot stand still in the face of challenges because they will be superseded and kept at a back foot. Social implications Markets and states are embedded in each other, and the way they are regulated is of a significant importance to varied stakeholders and people. Originality/value This paper is one of its kind, is unique in its character and evaluates embedded issues using empirical evidence in a way not done in its context before. Secondary data sources have been evaluated to achieve a thoughtful analysis of the objectives of the paper.

Obstacles to Peacebuilding Revisited

In January 1992, the economic program sponsored by the International Monetary Fund in El Salvador sacrificed the government's ability to implement the UN-mediated peace agreement on the altar of budgetary discipline and placed the country at the brink of relapsing into war. This episode turned the spotlight on a major obstacle to peacebuilding: the UN and the Bretton Woods Institutions, which frequently work elbow-to-elbow where war-torn countries struggle to move to peace, are all too often at odds and even on a collision course. This article analyzes the UN record since then; assesses whether institutional changes have improved or hindered UN capacity to support countries in overcoming such obstacles; and makes proposals for moving forward in a more effective, coherent, and coordinated way.

John H. Jackson, the Law and Economics

Before and after World War II, trade policy was largely dealt with, and shaped by, the communities of government economists and diplomats. Lawyers were hardly involved or in the lead. John Maynard Keynes and Harry Dexter White coined the Bretton Woods institutions. Clair Wilcox was instrumental in creating the General Agreement on Tariffs and Trade, and Joseph Viner influential in the early years of the GATT. All were economists. Harry L. Hopkins, the father of New Deal and senior adviser to President Roosevelt, entered social work and government after college. In 1944, he coined the adage, expressing the philosophy of international cooperation, which would influence subsequent generations and legal developments so strongly: ‘Trade conflict breeds non-cooperation, suspicion, bitterness. Nations which are economic enemies are not likely to remain political friends for long.’

Analysis of the Impact of International Monetary Fund Programs on Economic Performance of Kenya

<p>Like most other countries in developing countries, Kenya faces economic challenges as it tries to stabilize its balance of payments, reduce external debts and curb high unemployment rates. Structural adjustment programs (SAPs) are defined as economic programs mainly set for developing countries supported by the Bretton Woods institutions since the beginning of 1980s. As a result of prolonged balance of payments deficits, high unemployment rates and high debts, brought about by poor economic performance, the country has turned to International Monetary Fund for credit assistance. This research sought to examine if there was a relationship between structural adjustment programs and economic performance in Kenya. The results in this study revealed a significant correlation between IMF structural adjustment programs and economic performance in Kenya. The findings showed that the three dependent variables analyzed notably, balance of payments, debts, and unemployment showed a strong correlation with IMF structural adjustment programs.</p>

BRICS banking and the debate over sub-imperialism

Funded at $100 billion each, the BRICS Contingent Reserve Arrangement (CRA) and New Development Bank (NDB) represent ‘sub-imperial’ finance, insofar as, by all indications, they fit into – instead of providing alternatives to – the prevailing world systems of sovereign debt and project credits. Balance of payments constraints for BRICS members will not be relieved by the CRA, which requires an IMF intervention after just 30% of the quota is borrowed. In this context the NDB would appear close to the Bretton Woods Institution model, promoting frenetic extractivist calculations based on US dollar financing and hence more pressure to export.

Bargaining to Lose the Global Commons

In Bargaining to Lose: The Permeability Approach to Post Transition Resource Extraction [1] Natasha Chichilnisky-Heal introduces an original and fertile explanation for the resource curse. Her permeability approach questions the treatment of the as a decision maker having the public good as an objective, and replaces it by the results of a game between the and International organizations. Her new theory is illustrated with unique hands-on experience in the case of copper and gold mines in Mongolia and Zambia, and focuses on a game between the and key financial organizations: the Bretton Woods Institutions (IMF, World Bank) and MNCs. This piece extends and generalizes Bargaining to lose providing economic models that validate the original conclusions, and exploring its implications for the global commons: the atmosphere, the oceans and biodiversity. Chichilnisky-Heal’s state is a transition to a new globalized society where the sovereign - a relatively recent creation - is receding giving rise to a new set of global economic agents and institutions that better explain the dynamics of the global commons. We show that the permeable complements other explanations for the resource curse [2] as a global market failure magnified by globalization and based on the lack of well-defined property rights on natural resources during the pre-industrial period. We generalize Chichilnisky-Heal’s bargaining to lose approach to the resource curse and explore its natural implications for the environmental crisis on the global commons. The solutions that Chichilnisky-Heal proposes, e.g. limiting the Bretton Woods’ Institutions’ ‘seat at the negotiation table’ of resource extraction contracts, could help resolve the environmental crisis that is based on over-extraction of global resources.

Global Economic Governance: Russia's Strategic Transition from West to BRICS

The period since 1944, the end of Second World War have lead to emergence of multilateral agencies and institutions of Global Governance: The United nation Security Council, Bretton woods institutions -- IMF and World Bank, General Agreement on Tariff and Trade etc. for the promotion of economic and political interest of the allied nations for decades to come. These Institutions both governmental and civil have been working effectively to promote the interest that they represent, but none can represent the interest of the world as a whole which is facing problem of political and economic instability and unsustainable development. The present study attempts to explain the viability of sanctions imposed by supranational geopolitical block European Union (EU) and United Nations as a result of Russia’s annexation of Ukraine. The sanctions were countered by Russia imposing ban on imports from many European nations which will lead to decline in GDP of Russia by 1% and its imports by 9% in 2014. The restrictive trade of Russia with western nations may lead to shift in strategic partners to the emerging economies of BRICS which account for 42% of world’s population and a quarter of world’s economy. This shift will enhance bilateral and multi-lateral trade among BRICS’s nation with respect to oil supply, scientific and technical cooperation, defense and finance leading to increase in joint ventures and licensed production.

NEOLIBERALISMO, POLÍTICA EXTERNA E A CONSTRUÇÃO DO MERCOSUL

Entre o final dos anos 1980 e início dos anos 1990, a América do Sul foi palco de uma sistemática implantação de políticas neoliberais, impostas pelas instituições de Bretton Woods. Como alternativa para uma melhor inserção nos mercados internacionais, por meio da liberalização econômica multilateral, Brasil e Argentina lideraram um movimento de aproximação que culminou na criação do Mercado Comum do Sul (Mercosul), em 1991. Assim, diante da necessidade de melhor compreender o processo de construção do bloco econômico sul-americano, esse trabalho tem por objetivo apresentar reflexões quanto ao que foi o neoliberalismo na América do Sul, como esse se materializou na Política Externa dos países da região e, consequentemente, definiu e caracterizou o Mercosul.

Appraising ECOWAS Future Agenda for Fostering Democracy and Peacebuilding in West Africa

The liberal democratic movement is a global movement that is aimed at facilitating the Western cultural hegemony. The movement has enjoyed universal approval in the post-cold war era through the proselytizing networks of international institutions such as the Bretton Woods institutions, Western universities and research institutions, exchange programmes, professional networks of scholars and the philanthropic foundations among others. These agencies have intensified the call for global, regional and sub-regional partnerships as basis for addressing new and emerging challenges facing mankind, and for the convergence of potentialities for tackling them. The aim of this paper is to examine the concept of democracy within the context of the challenges of violent conflicts and insecurity in West Africa, and review the Economic Community of West African States’ (ECOWAS) framework for fostering democracy and peacebuilding in the sub-regional. The paper identifies the challenges of the ECOWAS democracy and peacebuilding frameworks, and attempt to design a future agenda for the fostering of democracy and peacebuilding in ECOWAS by advancing through the protection of economic, social and cultural rights, prioritizing both democracy and peacebuilding, vigorous pursuit of the vision of ECOWAS of Peoples, more engaged fight against terrorism, strategic role of armed forces, media and civil society organizations (CSOs).

The Future of Multilateralism: Governing the World in a Post-Hegemonic Era

Since the middle of the twentieth century, the governance of the global system has been organized around the United States and the advanced industrial democracies. In the shadow of the Cold War, these countries established a wide array of global and regional institutions to manage economic, political, and security relations. The Bretton Woods institutions, GATT (and later the WTO), the United Nations, and various functional institutions provided the bulwark for an open and managed postwar world economy and global order. An American-led alliance system provided a structure for regional security in Europe and East Asia. When the Cold War ended, these far-flung institutions were extended into a more fully global multilateral system of governance. The United States dominated the global order. But, more so than did leading states in previous eras, it established its dominance through institutions. It was an American-led liberal hegemonic order.

Post‐2015 Global Governance of Official Development Finance: Harnessing the Renaissance of Public Entrepreneurship

AbstractThe spirit of ‘public entrepreneurship’, reignited by large‐scale and long‐term official finance from emerging economies, is now driving a process of ‘creative destruction’ in the established systems for governing official development finance primarily forged among advanced economies. In response to this burgeoning official finance from emerging economies once on the margins or outside of these established systems, potentially seismic shifts are occurring in three central governance systems—the reporting systems for official development assistance in the OECD Development Assistance Committee, OECD export credit disciplines and debt sustainability in the Bretton Woods Institutions. Emerging economies create competitive pressures that work to redress the undue rigidities in these established frameworks, opening the way to meeting vast development financing needs. If not well managed or coordinated, however, growing official finance runs the risk of further rounds of financial arms races and debt crises. To harness the processes of ‘public entrepreneurship’ as a force for good in realizing a transformative post‐2015 development agenda requires international cooperation to reshape global governance of official development finance. Copyright © 2015 John Wiley & Sons, Ltd.

The rationale for and potential role of the BRICS Contingent Reserve Arrangement

This article examines the potential role the BRICS Contingent Reserve Arrangement (CRA) could play in stabilising countries experiencing a high degree of economic volatility. The CRA is a US$100 billion pooled reserve fund that has its origins in the fifth BRICS Summit hosted in Durban. The CRA was set up to help emerging nations deal with liquidity shortages and to strengthen financial systems during crisis. The article examines the debate on the effect of capital market liberalisation and collates some relevant macroeconomic data on the BRICS economies in order to explore the case for a contingent reserve facility. It is found that emerging economies that rapidly liberalised their capital accounts experienced increased economic volatility, creating an uncertain macroeconomic environment and hampering the ability of policymakers to conduct appropriate stabilisation policy. The article takes the position that the CRA could play an important role in providing liquidity to distressed emerging economies. However it concludes that the CRA facility does not signal a significant break from the Bretton Woods institutions on the part of the BRICS countries.