Question

How important were domestic political institutions in shaping the outcomes of the Bretton Woods argument? answer in depth.

Answer 1

Economic policy remains a politically and socially sensitive issue,since it has distribuitional consequences on the countries and causes frictions between the values and institutions of state in the external environment.This happens because economy has not been able to be released from policy and in turn policy has not been able to be disengaged from economy atleast upto now and probably this is not due to happen in the near future.

The world is going through various periods of greater or lesser politicization of the economy.Politicisation increased in the interwar years and led to protectionist policies.

The Bretton Woods agreement was a miraculous achievement of instituitonal innovation and economic philosophy and the two international institutions used to constitute the governance framework of the global economy until th 70's.

The Bretton Woods conference has also attracted many critics over the years. One of the most consistent criticisms concerns its treatment of international development issues. The Bretton Woods agreements are commonly portrayed as a product of Anglo-American negotiations between 1942 and 1944 in which little attention was paid to the concerns of poorer - or “Southern” – countries.[1] This historical narrative has reinforced arguments that the Bretton Woods system has long privileged the narrow interests and perspectives of Northern countries over those of the Southern countries.

Bretton Woods agreements, his commitment to international development was widely shared in the US government throughout the 1942-44 period. So too was his commitment to what Toye and Toye call “procedural multilateralism” which provided many poorer countries with a formal role in the negotiation of the Bretton Woods order and in its subsequent administration

The Bretton Woods Institutions (BWIs)—the World Bank and the International Monetary Fund (IMF)—have come under increased scrutiny and criticism over the past several years. In 2000, thousands of demonstrators took to the streets of Washington, DC, and Prague to protest against these institutions and demand change. (Similar protests, scheduled for September 2001, were called off in the wake of the terrorist attacks in New York and Washington.) The protests followed a scathing report by a prominent congressionally appointed panel-the Meltzer Commission—that called for drastic reforms of the World Bank and IMF. Combined with the ongoing criticism by advocacy groups from both developing and industrialized countries, these events have focused unprecedented attention on the BWIs.