The Performance of the Breton Woods Institutions
Critically evaluate the performance if the Breton Woods Institutions. What do you think should be done with these institutions in the future?
The Breton Woods institutions are named that because in 1944 at a conference in a place called Breton Woods in New Hampshire, USA. This is where the International Monetary Fund and World Bank were formed – it was due to the financial turmoil of the 1930’s in particular the Wall Street Crash in 1929, where the American Stock market (which was the largest market at the time) plummeted. It was implemented to offer financial support and rebuild its economy, most recently after the institution was formed Europe needed the most help after the Second World War - but soon it was there for the developing world. Harry Dexter White was the first to propose a ‘new economic world order based on a Bank’ , and he was convinced that ‘the US needed to reconstruct Europe, and create a stable world market in the Third World.’
The IMF acts as a bank to its 184 members offering loans to severely deprived countries, an example would be the IMF giving a loan to Indonesia where millions were facing extremely depleted food shortages. However, there are real strict conditions to the loan which the country has not choice but to adhere to, otherwise they don’t receive the loan. This loan is meant to help the countries get ‘back on their feet’ as it were, however but has sometimes leading to ‘serious recession’ in places like Indonesia.
However, there have been immense problems with the Breton Woods institutions and whether it should remain or not? For instance ‘Congress has given over $18Billion in extra funding’ There have been loans which total to tens of billions that have seriously drained the Breton Woods fund., the Asian crisis did not help this and some critics even argue that the IMF could have foreseen the crisis and ceased it much sooner, ‘the IMF has also been attacked for not trying to avert the Asian market crisis, and for not
The Breton Woods institutions are named that because in 1944 at a conference in a place called Breton Woods in New Hampshire, USA. This is where the International Monetary Fund and World Bank were formed – it was due to the financial turmoil of the 1930’s in particular the Wall Street Crash in 1929, where the American Stock market (which was the largest market at the time) plummeted. It was implemented to offer financial support and rebuild its economy, most recently after the institution was formed Europe needed the most help after the Second World War - but soon it was there for the developing world. Harry Dexter White was the first to propose a ‘new economic world order based on a Bank’ , and he was convinced that ‘the US needed to reconstruct Europe, and create a stable world market in the Third World.’
The IMF acts as a bank to its 184 members offering loans to severely deprived countries, an example would be the IMF giving a loan to Indonesia where millions were facing extremely depleted food shortages. However, there are real strict conditions to the loan which the country has not choice but to adhere to, otherwise they don’t receive the loan. This loan is meant to help the countries get ‘back on their feet’ as it were, however but has sometimes leading to ‘serious recession’ in places like Indonesia.
However, there have been immense problems with the Breton Woods institutions and whether it should remain or not? For instance ‘Congress has given over $18Billion in extra funding’ There have been loans which total to tens of billions that have seriously drained the Breton Woods fund., the Asian crisis did not help this and some critics even argue that the IMF could have foreseen the crisis and ceased it much sooner, ‘the IMF has also been attacked for not trying to avert the Asian market crisis, and for not
Bibliography: Books ‘Global Institutions and Development; Framing the world?’, Boas and McNeill, Routledge, 2004. ‘Global Political Economy’, Gilpin, Robert, Princeton University Press, 2001. ‘Global Shift’, 5th Edition, Dicken, Peter, Sage Publications Ltd, 2006 Websites