International Institutions

1. International Institutions Providing Order (Control?) to the World after the 2nd World War

2. Why International Institutions? • Theory: Manage the global economy so: • The calamitous competition (and punishment) after World War I could be avoided • Market capitalism and liberal democracy could flourish • Expectations • Orderly economic growth so that all could prosper • Triumph of capitalism over communism

3. What Organizations? • The United Nations and its subsidiaries • Governing entities • General Assembly, Security Council • Programmatic entities • UNESCO, UNICEF, UNDP, refugee agencies, WHO • The Bretton Woods institutions and their successors • The World Bank • The International Monetary Fund • The General Agreement on Tariffs & Trade/World Trade Organization

4. Significance of the Cold War • International institutions became battlefields and combatants in the Cold War • UN and its agencies • Many successes away from the center of the cold war, including preventing nuclear war • Captive of Cold War maneuvering • Bretton Woods organizations • Tools of western interests in the Cold War

5. The International Monetary Fund • The purposes of the International Monetary Fund are: • (i)  To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. (ii)  To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy. (iii) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.

6. The International Monetary Fund • (iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade. (v) To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. (vi) In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members

7. Criticisms of the IMF • The IMF has created an immoral system of modern day colonialism that SAPs the poor • The IMF serves wealthy countries and Wall Street • The IMF is imposing a fundamentally flawed development model • The IMF is a secretive institution with no accountability • IMF policies promote corporate welfare

8. Criticisms of the IMF • The IMF hurts workers • The IMF's policies hurt women the most • IMF Policies hurt the environment • The IMF bails out rich bankers, creating a moral hazard and greater instability in the global economy • IMF bailouts deepen, rather then solve, economic crisis

9. The World Bank • The World Bank Group’s mission is to fight poverty and improve the living standards of people in the developing world. It is a development Bank which provides loans, policy advice, technical assistance and knowledge sharing services to low and middle income countries to reduce poverty. The Bank promotes growth to create jobs and to empower poor people to take advantage of these opportunities

10. Critique of the World Bank • During the Cold War, it was a bad bank, providing cover for dictators as long as they were pro-Western • It privileges private sector initiatives over the development of human capital—health & education • It helps transnational corporations gain strangleholds over the economies of poor countries

11. World Trade Organization • The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.

12. Critique of the WTO • Lack of transparency • Rules favoring the well off (they made the rules) • Rule that any regulation that would inhibit a company’s ability to profit is illegal, even if that company does damage to others • Privileging trade over environmental issues, human well-being

13. Progressive Reforms For International Institutions • Tobin Taxes • sales taxes on currency trades across borders • Emphasis on education & health above balancing budgets • Greater transparency • Fairer governance, administration