The Revival of the Liberal Creed: The IMF, The World Bank, and Inequality in a Globalized Economy
Half the people and two-thirds of the countries in the world lack full control over their own economic policy decisions. To a great extent, expatriate "experts" managed by industrial country nationals and based in Washington DC regulate their macroeconomics, investment projects, and patterns of social spending. The principles guiding these decisions from afar are known as the Washington Consensus. They are based on the "neoliberal" or "market-friendly" brand of economic policy analysis that has become predominant over the past dozen years. In some cases local policy-makers have been even more enthusiastic about neoliberalism than their colleagues from Washington. Such "globalization" of economic policy, however, has precedents. In fact, the dramatic shifts in economic and social policy of the 1980s go far toward recreating the environment prior to the Great Depression; advocates of "neo"liberalism say little that is unfamiliar from the debates of the 1920s. The world has come full circle - institutionally, ideologically, and politically. Out of the disaster of World War II emerged an international consensus of economic collaboration of governments and the liberty to organize national life at will which was manifested in the establishment of the World Bank and the International Monetary Fund. Paradoxically, for developing countries these same institutions today represent the intellectual backbone and political force behind the dismantling of the truly utopian ideas of the 1940s. By first providing a historical account of the origins and evolution of the World Bank and the IMF, the paper attempts to speak to the present debate on the issues of "globalization", when the capacity to reconcile market and social contradictions is more and more impaired by growing economic and financial imbalances that come with increasing interdependence of liberalized global markets. These issues are then illustrated in the context of concrete country experiences with structural adjustment policies and their distributional outcomes in a globalized economy. The paper concludes by suggesting ways to reform the two agencies.
|Date of creation:||Oct 1996|
|Date of revision:||Jan 1998|
|Contact details of provider:|| Postal: 6 East 16th Street, New York, NY 10003|
Web page: http://www.economicpolicyresearch.org
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:epa:cepawp:1996-05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bridget Fisher)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.