Chapter

The Theory and Practice of Global Economic Governance in the Early Twenty-First Century: The Limits of Multilateralism

Richard Higgott

in The Consequences of the Global Financial Crisis

Published in print May 2012 | ISBN: 9780199641987
Published online September 2012 | e-ISBN: 9780191741586 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199641987.003.0002

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The Global Financial Crisis (GFC) and its aftermath have caused some observers to question whether the international economic institutions developed in the Bretton Woods era are any longer suitable for the challenges they face in the contemporary age: if they are unable to prevent (increasingly recurring) crises or facilitate a more general process of long-term economic collective action problem solving what are they for? This kind of analysis misses the point. For all their apparent failings the need for such institutions is unlikely to disappear in an era characterized by higher levels of economic interdependence. Global economic governance may still be imperfect and, in contrast to the global economy, underdeveloped. But if global governance is to evolve, multilateral economic institutions of one kind or another must be at least one of the key elements of the process. The emergence of the G20 is discussed and its limitations reviewed. The generic challenge is to adapt multilateralism to the dynamics of a world battling to come to terms with changing power balances and emerging policy agendas that do not lend themselves easily to the approaches to collective action problem solving that prevailed in the second half of the twentieth century.

Keywords: Bretton Woods; G7; G20; International Monetary Fund; World Bank

Chapter.  8325 words. 

Subjects: Political Economy ; Financial Institutions and Services

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