An Introduction to International Relations

Introduction

This chapter explores the role of three global economic institutions (GEIs) in contemporary economic governance: the International Monetary Fund, (IMF), the World Bank and the World Trade Organization (WTO). The impact of GEIs on states and societies is complex, and widely varying assessments of the performance of these organisations can be found in the literature. The first part of the chapter discusses global governance and globalisation, and examines competing perspectives on international organisations given the absence of theoretical consensus on the roles and functions of international economic organisations. Controversies over the role of the GEIs in the global economy have focused on the economic impact of their activities and their representative nature as institutions of governance. The second part of the chapter therefore explores the historical evolution of the IMF, World Bank and WTO as they have adapted to the challenges of an evolving global economy. In the wake of the Global Financial Crisis (GFC), there has been renewed speculation concerning the continuing relevance of key international economic institutions. The third section of the chapter therefore focuses on key challenges facing the GEIs in the wake of the GFC.

The three global economic institutions discussed in this chapter owe their existence to the creation of a multilateral economic order after the end of World War II. This commitment to a multilateral order based on liberal economic principles has been called into question since the GFC. It has been argued that ‘multilateral institutions and the aspirations for them have not matched the pace of global change or new rationales for multilateral engagement emerging from global challenges’ (Adams and Luchsinger 2012: 10). In this context, it is pertinent to note that the heads of key global economic institutions have intervened in this debate. For example Pascal Lamy, then the Director- General of the WTO, warned in 2012 that