Reform of the International Institutions
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Reform of the International Institutions

The IMF, World Bank and the WTO

Peter Coffey and Robert J. Riley

The seemingly endless problems encountered by the IMF, WTO and World Bank provide major reasons for seeking reform. However, an additional impetus is the changing balance of economic power in the world. The volume begins with an overview of the Bretton Woods and international trading systems. Following this are discrete, in-depth discussions of the three institutions from American and European points of view. The authors emphasise the need for making the IMF and World Bank more regional in structure and, like the European Bank, more frugal in the lifestyles of their officials. Similarly, they call for a narrower focus in the mission of the World Bank and the IMF. In the case of the WTO, they call for a democratic reform of the organisation comprising participation by experts and, above all, better representation and support for Third World countries.
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Chapter 3: The International Bank for Reconstruction and Development: The World Bank

Peter Coffey and Robert J. Riley


Peter Coffey INTRODUCTION The International Bank for Reconstruction and Development (IBRD), which is the other significant institution created by the Bretton Woods Agreement, was mainly intended to help in the reconstruction of post-war Europe. When this reconstruction (mainly in Western Europe) was achieved surprisingly swiftly, the institution’s original raison d’être had disappeared, and, with this evolution, the name of the institution was changed to the World Bank, and its focus was redirected toward the Third World. In the strict sense of the meaning, the World Bank is not a bank, and, furthermore, it is now composed of three institutions, the Bank itself, the International Finance Corporation (IFC), and the International Development Association (IDA). Equally, unlike ‘real’ banks, in the case of the World Bank, only 20 per cent of its capital is actually called up. There is a further dual complication: first, the original long-term purpose of the Bank as seen by one of the main architects of the Bretton Woods system, Keynes, was to ensure a regular supply and movement of capital in the world to avoid a repetition of the catastrophic depression of the 1930s. Second, with the so-called ‘concordat’ of the 1980s between the Bank and the IMF, the real role of the World Bank has become blurred and it appears, to the author at least, that it does, on occasions, interfere in the economic and monetary policies of countries when it should not. Having made this observation, it is now useful to examine the three...

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