From Bretton Woods to Neoliberal Reforms: the International Financial Institutions and American Power

Abstract

The last decade has seen numerous debates about the performance and the future of the International Monetary Fund (IMF) and the World Bank as well as many proposals for reform. Some have criticized the international financial institutions (IFIs) for creating problems of moral hazard and have argued that their original mandates have been gradually distorted and overextended. Others have condemned the narrow theoretical framework behind structural adjustment programmes or the narrow focus on business interests and the disregard for civil society. Although such critiques are inspired by different assumptions and political orientations, many of them are characterized by a tendency to isolate the IFIs’ operations from the dynamics of the capitalist relations of which they are part. More substantial critiques of the IFIs must locate their discourses and policies in the context of the neoliberal transformation of the economies and societies of the global South — a process that involves the liberalization of trade and finance, the creation of opportunities for accumulation through the privatization and commodification of public goods, the protection of foreign direct investments and the building of domestic institutional structures of accountability to international financial markets. Indeed, over the past decade the role of the IFIs has been extended from the enforcement of these reforms to the management of their adverse effects (such as impoverishment, social dislocation, expropriation of public goods, regressive distribution of wealth and environmental degradation). Their new focus on poverty, governance and transparency was meant to shore up their legitimacy and to enhance their capacity to manage the conflictual and contradictory development of neoliberal globalization and contain the spread of the disruptive effects of crises.