Global Economics Institutions

GEIs exist within a changing global environment and one measure of their success is their ability to adapt to change. In some respects the IMF (International Monetary Fund) has responded creatively to the challenges posed by a changing international financial order, but in other respects it has failed either to provide appropriate regulatory oversight or develop polices suitable for its membership. Initially the IMF was essentially a short term lending (12-24 month loans) institution providing loans through its stand-by arrangements. Although the IMF has clearly responded to changing global financial system. Like its twinned institution, the World Bank has show a degree of flexibility and adaptability to a changing international economic order. The world Bank has also adapted its approach to development over time. Since its early years the bank has had four identifiable shifts in its approach to the financing of economic development. Nevertheless, the World Bank remains a deeply controversial institutions. Supporters of the Bank contend that its provides developing countries with much-needed capital, and maintain that the projects it supports are vital in the fights against world poverty.  And  the World Trade Organization’s (WTO) contribution to global governance has varied depending on the view taken of organization’s ability to affects countries’ trade policies and analysis of the beneficial effects of trade liberalization. The WTO provides a framework for the organization of international trade. First, as an international organization the WTO is primarily a legal agreement which provides a framework of rules, norms, and principles to govern the multilateral trading system. Second, it is a forum for multilateral trade  negotiations. Third, the WTO through its Dispute Settlement Understanding (DSU) facilitates dispute resolution. The WTO committed to the promotion of a liberal trading order. Its policies are predicated on an assumption that trade is better than no trade, and that barriers to trade are harmful to national and international welfare.

            The activities of the International Monetary Fund, World Bank, and World Trade Organization have far –reaching consequences for the livelihood of people around the globe. The IMF’s mocaroeconomic policy coordination, crisis management skills and role in economic  development have all sparked debate and controversy. The World Bank, as the world’s leading multilateraldevelopment agency, has a crucial role to play in poverty allevation. The creation of WTO signaled a stronger institutional base for the multilateral trading system, but the tension between futher trade liberalization and sectional interest has stymied its ability to fulfil this role.

            In respect of all three institutions persistent criticisms remains of their ability to contribute to stability, efficiency and justice in the global economy.  In a very stark manner the Global Financial Crisis raised pertienent issues about the governance role of these institutions and brought to the forefront the dilemmans of reforming their internal governance structures to address the perceived crisis of legitimacy they face.

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