• 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...


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.


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.


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?

    Nor do the Palestinian parliament and advisory bodies in Kuwait. None of these faux assemblies is elected by an unbound citizenry, free to criticize (much less recall, impeach, or depose) their heads of state by legal means, or even to speak openly to journalists about the failings of their own government.

  2. Industrial Labor Policy in Canada and Australia: A Comparative Approach.

    Another reason for decreasing membership rates, according to the report, is the fact that more and more workers choose only to join unemployment insurance funds (Arbetsl´┐Żshetskassan), and not the trade unions with which the funds have traditionally been associated which traditionally has been the normal pattern, known as direct membership of unemployment insurance funds.

  1. The impostion of Structural Adjustment Programmes on sovereign African states is a form of ...

    However, due to their precarious economic position, and dependence on western imports to keep their fledgling industrial sectors and state apparatus functioning, african leaders, sooner or later, have to bargain once again with the IMF in order to get debts re-scheduled; credits for vital imports; and the seal of approval to attract foreign private investment and loans.

  2. In what ways did the institutional legacy of the Franco regime shape Spain(TM)s transition ...

    (Arango 1978: 255) This therefore enabled him to have an overwhelming impact over the nature of the transition from dictatorship to democracy. King Juan Carlos had been educated under Franco's rule, and it was the dictator's plan that, "Juan Carlos, who swore loyalty to the Principles of the Movement, would continue Francoism after Franco."

  1. Sierra Leone and Third World debt relief.

    years of civil war and unrest that left more than 2 million of its estimated 4.5 million residents homeless and internally displaced, made refugees of almost 500,000 more people, and resulted in the death of an estimated 20,000 (although it could be closer to 200,000)

  2. Health and Safety Policy and Practice - Competency

    (Ridley and Channing, 2008: 42) Legislation only applied to those workers who were on site, thus if the job required working away from their designated area, as a contractor, there was no legislation in place to cover these employees. Separate legislation with variations and methods of enforcement would apply to a factory, an office, a mine, or a quarry.

  1. Evaluate the role of the USA in shaping international drug policy.

    a way to further their own domestic policy crusades whilst exporting ideology consciously or unconsciously (Begley- Taylor, 1999, pg 5). Prior to evaluating the United States quest in shaping international drug policy it is necessary to outline America's ideology on drugs for purposes of clarity.

  2. Integrated but not Assimilated - Many have argued that the Kurds should have their ...

    (McDowell, 151-186) This illustrates an interesting feature of the Kurdish regions in Iraq, Iran, and Turkey. As different rebellions have taken place, the refugees and exiles have usually gone to the Kurdish regions of the neighboring countries, where they can continue to operate.

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