• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

To what extent do organizations like the IMF, WTO, and World Bank challenge the nation states ability to shape domestic economic and social policy?

Extracts from this document...

Introduction

To what extent do organizations like the IMF, WTO, and World Bank challenge the nation state's ability to shape domestic economic and social policy? At the conclusion of World War II, several international institutions were established to manage the world economy and prevent another Great Depression from happening again. These institutions include the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (now called the World Bank), and the General Agreement on Tariffs and Trade (GATT), which was expanded and institutionalized into the World Trade Organization (WTO) in 1995. These institutions have not only persisted for over five decades, but they have also expanded their mandates, changed their missions and increased their membership. Part of the problem for these institutions lies in their legacy. They were designed to help the developed countries create a cooperative and stable world economy in a nonglobalized world. The IMF was established to support the fixed exchange rate system created at the Bretton Woods conference in 1944; its role was to aid countries that were experiencing difficulties in maintaining their fixed exchange rate by providing them with short term loans. The IMF also maintained global monetary cooperation and stability by making loans to countries with balance of payment problems, stabilized exchange rates and stimulated growth and employment. The IMF has since expanded its role to include a strong surveillance function: it must approve a country's economic program in order for a government to access grants and loans from virtually all governmental and private financiers. ...read more.

Middle

on products considered as sensitive by Argentina, increase in tariffs on imports of crude oil by South Korea, re-introduction of export subsidies for certain dairy products by the European Commission, and a rise in import duties on cars and trucks by Russia. There has been much speculation in joining international institutions and publicly agreeing to abide by its rules, norms and practices because it has important domestic political consequences. It can help domestic leaders to alter policies at home that they otherwise would not be able to do. It can help them lock in "good" policies (i.e., ones that enhance general welfare) and resist pressures by special interests to adopt "bad" policies (i.e., ones that benefit special interests only). For others the key is that achieving cooperative agreements with other countries brings advantages for some domestic groups that otherwise would not be involved in a change of policy; once their interests are engaged through the multilateral process they can become strong proponents for policy change at home. The domestic political consequences of IMF and World Bank membership may be important but little research addresses this directly. Many websites note that countries underwent IMF programs out of choice as much as necessity. Governments were using the IMF to produce changes in policies that they desired. But unfortunately, these changes did not produce economic growth or poverty reduction. ...read more.

Conclusion

The critic's theoretical understanding of the WTO as a vehicle only moved by corporate profit-seeking logic is borne out from the WTO's history to date. In every case that has been brought to the organization challenging environmental or public safety legislation on behalf of corporations, the corporations have won. When foreign commercial shrimp fishing interests challenged the protection of giant sea turtles in our endangered species act, the turtles didn't stand a chance. Critics of the IMF say that since the 1980's, the organization has been bailing out countries during financial crises with emergency loan packages that have specific conditions. With this assistance, countries have to follow the IMF's policies to get loans, international assistance, and even debt relief. The predictable consequences have always been disastrous. Tight monetary policy and skyrocketing interest rates not only stop productive investment, stampeding savings into short-run financial investment instead of long-term productive investment, it keeps many businesses from getting the kind of month-to-month loans needed to continue even ordinary operations. This fosters unemployment and drops in production and therefore income. Fiscal austerity-raising taxes and reducing government spending-further depresses aggregate demand, also leading to reductions in output and increases in unemployment. Likewise, if any of the government spending eliminated was actually improving people's lives, then reductions in those programs eliminates those benefits. Privatization of public utilities, transport, and banks is always accompanied by layoffs. Whether productivity and efficiency is improved in the long run depends on how badly the public enterprises were run in the first place, and if private operation proves to be an improvement. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree International Politics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree International Politics essays

  1. Why Is the Middle East a Conflict Area?

    have the courage to say that they are poor because their populations are nearly half illiterate, that their governments are not free, that their economies are not open, and that their fundamentalists impede scientific inquiry, unpopular expression, and cultural exchange.

  2. Should the United States Get Involved with Problems in the Middle East?

    on the specious and murderous grounds that the ends justify the means. The huge majority of Muslims understand only too clearly that the extremists do not speak in their name but are likely to unleash Armageddon on all, and they view this with horror.

  1. Is free trade beneficial or detrimental for developing states?

    is more suited to banana growing, thus the Indonesian business would probably have to shut down whereas under protectionism they could have maintained a high level of demand within the domestic market. That said, as far as the global economy is concerned, increased competition is certainly a positive outcome of

  2. Health and Safety Policy and Practice - Competency

    Moreover, it was argued that '[r]eform should be aimed at creating the conditions for more effective self regulation by employers and employees jointly' (Hutter, 2004: 22). The intentions being to make those involved understand that health and safety matters are their own concerns and not just the remit of external agencies.

  1. Analysis of the mechanisms used by international economic elites to convince people of the ...

    Big world richer corporations, the wondrous inventions of the modern economy like Apple, Microsoft, Facebook apparently improved the lives of middle-class consumers. Consumerism is the key word in the elite economic powers to guarantee their economical, institutional and global powers.

  2. Nato's Istanbul Cooperation Initiative. NATOs Istanbul Initiative inscribes itself in the ...

    means the preservation and extension of the system of alliances, created after World War II, that has permitted the construction of a sustained cooperation between the principal democratic powers and in which the United States would continue to exercise its natural leadership thanks to a vast reform of its armed

  1. Caste in India

    'Ethnic politiking' based on caste is therefore an effective strategy for those who wish to gain posts ( Chandra, 27 ). Ghosh laments that caste-representation is merely a tool which guarantees a vote bank for parties: to win votes, it is 'easiest' to appeal to caste or separatist sentiments ( 95 ).

  2. Is War inevitable amongst sovereign States?

    of reason".11 Assuming this then, and supposing that mans imperfections lead to conflict amongst one another, it seems that "Wars among states are then as inevitable as are defects in the nature of man", apparently condemning man to a warring world.12 These assumptions on the nature of man are the foundation of Realist thought.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work