International Policy Coordination in Historical Perspective: A View from the Interwar Years

This paper examines the international financial relations of the interwar period to see what light this experience sheds on current concerns over international policy coordination. The analysis proceeds in three parts. The first part considers the role for policy coordination as viewed by contemporaries at the start of the period; it takes as a case study the Genoa Economic and Financial Conference of 1922. Efforts at Genoa to coordinate policies ended in failure; the second part therefore considers the effects of noncooperative strategies within the framework of the interwar gold standard. The analytical model developed in this section suggests that the failure to coordinate policies lent a deflationary bias to the world economy which may have contributed to the onset of the Great Depression. The third part asks what policy-makers learned from this failure to coordinate policies, taking evidence from the next effort to establish a framework for international financial collaboration: the Tripartite Monetary Agreement of 1936.