Uri Dadush
The National Interests - September 22, 2014
When the Berlin Wall fell in 1989, the Bretton Woods institutions—the
IMF, the World Bank, and the World Trade Organization
(WTO)/GATT—appeared invincible. Orchestrated by the United States as the
sole superpower, they seemed set to durably underpin a universal
economic order. But they are now in rapid and unmistakable decline,
which can only be reversed by a major shift in approach by their
political masters.
As the Cold War receded, all three institutions felt a strong wind in
their sails. Hundreds of millions of Chinese, Russian and Vietnamese
workers became part of the global market economy. The Eastern Europeans
became enthusiastic joiners of the European Union. China, Russia, and
dozens of other countries embarked on comprehensive negotiations to
become members of the WTO, not only adopting the totality of the rules
that govern trade, but accepting even tougher disciplines than applied
to existing members. Previously planned economies became active members
and users of the World Bank and the International Monetary Fund, eagerly
adopting the tenets of the Washington Consensus. Meanwhile, economic
growth in the developing world surged, democracy spread, and
international conflicts declined in frequency and intensity.
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