The Global Economic Order
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The Global Economic Order

The International Law and Politics of the Financial and Monetary System

Elli Louka

Exploring in depth the institutions that underpin the global economy, this study provides invaluable insights into why a minimum economic order has endured for so long and why states are unwilling to establish a maximum order, a global safety net for all. The author investigates how debt – a critical component of states’ economic infrastructure – leads to debilitating crises, and how these crises undermine the economic autonomy and political independence of states. 
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Chapter 17: Foundations of a minimum economic order

Elli Louka


In this chapter we analyze the minimum economic order including bilateral swap agreements and regional financial arrangements. Regional financial arrangements can be tapped during a crisis especially because they carry less stigma than the IMF. However, their lending capacity remains minimal and conditional. Developing states have complained about the lack of a global safety net. The sovereign and core states are, however, unwilling to establish institutions that would assume the function of lender of last resort for all states. As a result, countries that cannot print their way out of a crisis remain vulnerable. The lack of incentives of core states to establish a robust economic order that benefits the majority is the reason for the absence of such an order. There is no indication that these incentives may be changing since economic sovereignty has remained concentrated.

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