Failure of The International Monetary Fund & World Bank to Achieve Integral Development: A Critical Historical Assessment of Bretton Woods Institutions Policies, Structures & Governance
Syracuse Journal of International Law and Commerce
Scholars worldwide have clearly demonstrated the inability of the Bretton Woods Institutions (the "BWIs") to promote authentic sustainable development.' Some have criticized the BWIs for their inability to rehabilitate, evolve, and reform their respective policies. Some scholars argue that the core of this problem is the voting structures of the BWIs. Additional critiques address the lack of transparency and limited participation by developing countries in formulation of BWIs' policies; both deficiencies have resulted in fewer developing countries benefiting from these policies. Acknowledging these critiques, this article will argue that current BWI policies must be fundamentally redesigned, since many are archaic and others are counter-productive to integral sustainable development in the current global economy. Further, the article will argue that the dominant nations in the BWI have forced their political agendas on the rest of the world while hiding behind the veil of these multilateral funding institutions. In making these arguments, the article will begin with a review of the origin, purpose, and structures of the BWIs and offer a brief critique of their voting structures. Next, this article will analyze and critique the neoliberal revival of the classical laissez-faire liberal ideology now on a global scale, and show how it has played out in the Asian financial crisis, the current world financial crisis, and the on-going debt crisis. Two case studies will then be provided and discussed: one on Argentina; and a second on Sub-Saharan Africa. The paper will then analyze other institutions' alternative solutions to the ongoing problems with the BWI, specifically the Monterey Consensus, developed by the United Nations Financing for Development process, the "Heavily Indebted Poor Countries," created by the World Bank, and the G-20, a policy-advising group of 20 countries claiming to represent the most "systemically significant" world's economies. Finally, a conclusion will summarize this article's critique of the BWIs and suggest alternative lines of strategy. Part II first reviews the events and global instability that led to the Bretton Woods Conference creating the early BWIs, and then explains the Bretton Woods Conference itself and the global response to the creation of the BWIs. Part II then concludes with a critical analysis of the IMF and World Bank voting structures. Part III begins by showing how neoliberal agendas influence the policies of the BWIs through vote and governance. A historical analysis of the rise of the contemporary neoliberal ideology is then provided. At the heart of this has been the University of Chicago School of Economics, led by the late Professor Milton Friedman, and the Austrian School of Economics. Both were highly influential in developing a new and problematic model of so-called global 'development' for the BWIs. Part III then examines loan conditionality; the mechanism by which the BWIs pressure other countries into accepting neoliberal ideas." Part III concludes by providing a critical analysis of the neoliberal ideology in its application to the Asian Financial Crisis, along with case studies showing its impact on Argentina and Sub-Saharan Africa. Part IV analyzes alternative solutions, which have been put forth by various global endeavors. It begins with an examination of the Monterrey Consensus, the product of an international conference held in Monterrey, Mexico. Part IV then examines The Heavily Indebted Poor Countries, a program created by the World Bank and the IMF, which currently classifies forty developing countries with high levels of poverty and debt which are eligible for special assistance.' Finally, the G-20 is a group of twenty countries that hold periodic meetings to review and promote discussions pertaining to the promotion of international financial stability and the governance of the world economy. Finally, Part V concludes that the BWIs, due to their lending policies and governing structures, have restrained true global development. The BWIs have served as impediments to authentic development and these institutions are in need of fundamental reform including overhauls to their policies, voting systems, and governance structures. Part V proposes alternative strategies for authentic sustainable development through other multilateral global institutions.
Mark J. Wolff, Failure of the International Monetary Fund & World Bank to Achieve Integral Development: A Critical Historical Assessment of Bretton Woods Institutions Policies, Structures & Governance, 41 Syracuse J. INT'l L. & COM. 71 (2013).