SOCI 210 Lecture Notes - Lecture 9: Bretton Woods Conference, International Financial Institutions, Government Debt
3 May 2018
School
Department
Course
Professor
Monday, February 19th
International Financial Institutions (IFIs) and the United Nations (UN)
Response paper
• Answer the first question utilizing readings
• Closed vs. arms length supply chains
• Third question: more so on your experience
Introduction
• What is multilateralism?
o Arrangements among three or more states
o Purposes are usually peaceful, and over extended periods
▪ Enhancing peace and trade; trading partners never go to war
o Multilateralism can help governments improve their standing, influence,
security, and economic advantage
• Bilaterilsm: between two parties
Bretton Woods Conference (1944)
• Meeting of financial
• Establishment of the IMF and the World Bank
• New international economic order
Outcomes
• The US dollar becomes a global currency
o 1 OUNCE OF GOLD = $35 stable
o 1 ounce of gold = 175 cordovas
▪ 5:1 exchange rate
• Gold standard was put forward by the IMF to ensure people abided by these rules
o IMF main job is to stabilize currencies, can intervene if not
• Promotion of global trade (GAT)
o Restrictions to trade were removed
• Wold Bak’s pupose as deelopet, to fud lage ifastutue issios
• Initial mission: make sure the new economic order worker
• Critics: arm of the US, way for developed countries to impose their will on developing
countries
Role of the IMF has changed
• 1970s: Nixon decides to leave the gold standard current system is free floating
exchange rates
• Role becomes more ambiguous
o Trying to stop exchange rate wars, not pegged to an amount of gold
• Developed countries recovering from WWII; new clientele with balance of payment
problems
find more resources at oneclass.com
find more resources at oneclass.com
o Latin America: debt crisis
o SAPs: lending with conditionalities, countries are going to NEOLIBERALIZE
• Moves from its goal of monitoring exchange rates to significant investor, and conflict in
society
Recent Developments
• Debt crises in Latin America, Asia, and Russia where the currencies have crumbled
o IMF income declines as countries back their debt
o Ran out of dollar reserves to keep their currencies afloat
o Took more loans from IMF to survive
▪ By 2007, these were mostly paid back IMFs main funding comes from
these payments
• IMF running a deficit is this the end of IMF and Bretton Woods?
• BUT the Great Recession of 2008 happened at the end of IMF decline,
countries were in need of funds and IMF came to the rescue
• Iceland took the money, although before that did not accept SAPs
• Significant packages going to Greece, Cyprus, and Pakistan
o This money has been unable to get rid of unemployment and put the country on
a straight path
2007: total sovereign debt is incredibly low, public debt
2008 crisis: PIGs have high sovereign debt (Portugal, Ireland, Greece)
1982: debt crisis the federal reserve raising its interest rates, the countries not able to
borrow like before, go to the IMF.
• Accumulating debt is characteristic of neoliberalism; compare to low debt in 1970s
World Bank
• Created as the International Bank for Reconstruction and Development (IBRD)
o Originally: extend loans for physical infrastructure & government sponsored
programs that required a lot of investment
▪ Marshall plan also provided another avenue for reconstruction after
WWII for Europe
o Presently: assists a range of development projects in developing countries
▪ Poverty alleviation, social security, education deals ith goeae
issues
Recent Developments
• World Bank has been controversial
o Dominated by rich countries: US has 17% of votes power over major issues
▪ Certain countries interests dominating the world bank
• Developing countries pay more interest than receiving aid trap of always borrowing
• 2007: president of the WB was accused of corruption giving his GF a job in WB
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
International financial institutions (ifis) and the united nations (un) Response paper: answer the first question utilizing readings, closed vs. arms length supply chains, third question: more so on your experience. Bretton woods conference (1944: meeting of financial, establishment of the imf and the world bank, new international economic order. Initial mission: make sure the new economic order worker countries. Recent developments: debt crises in latin america, asia, and russia where the currencies have crumbled. Imf running a deficit is this the end of imf and bretton woods? countries were in need of funds and imf came to the rescue. Iceland took the money, although before that did not accept saps: significant packages going to greece, cyprus, and pakistan, this money has been unable to get rid of unemployment and put the country on a straight path. 2007: total sovereign debt is incredibly low, public debt. 2008 crisis: pigs have high sovereign debt (portugal, ireland, greece)
