International Economic Law and Monetary Measures

International Economic Law and Monetary Measures

Limitations to States’ Sovereignty and Dispute Settlement

Elgar International Economic Law series

Annamaria Viterbo

The 2007–2010 global financial crisis re-opened the debate on the reform of the international monetary and financial system. This well-argued book demonstrates the strategic role of international economic law in ensuring international monetary stability and global financial stability.

Chapter 2: The Bretton Woods institutions and their role in the provision of global public goods: focusing on international monetary stability

Annamaria Viterbo

Subjects: law - academic, international economic law, trade law

Extract

INTRODUCTION This chapter briefly describes the creation, evolution and actual role of the international economic law institutions created after World War II at the Bretton Woods Conference. The International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD) and the International Trade Organization (ITO) – and later the General Agreement on Tariffs and Trade (GATT) – were the three pillars of the new post-war international economic order. They were supposed to create an integrated framework: the activities of each institution were in fact complementary and functional to the achievement of the goals of the others. They were conceived to preserve peace and to foster economic growth and development in a holistic way, through international monetary stability, resources allocation and redistribution. The end of the par-value system and the progressive liberalization of financial markets and capital flows, however, changed the premises on which the Bretton Woods institutions were based. As we will see, in order to keep pace with the evolution of the world economy, their competences should be widened and strengthened and their governance structure reformed. In particular, today’s multilateral system still lacks a single international organization with the power to level-the-playing-field in financial regulation and monitor the whole system. 56 M2857 - VITERBO TEXT.indd 56 25/01/2012 16:33 The Bretton Woods institutions 57 1. THE BRETTON WOODS CONFERENCE AND THE POST-WAR INTERNATIONAL ECONOMIC ORDER: FOCUSING ON INTERNATIONAL MONETARY STABILITY The term ‘Bretton Woods system’ has become synonymous with the international monetary regime that emerged at the end of World...

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