International Organizations and the International Political Economy

Markets and International Governance

• What about the international economy needs to be governed?

– Currency exchange

– Contracts and property rights

– Infrastructure

– Regulation and oversight

• Liberals, realists, critical theorists, and the international political economy

International Economic Institutions

• Four main categories:

– Finance

– Trade

– Development

– Everything else

• There is much overlap among these categories

The Big Three IEIs

• The International Monetary Fund (IMF)

– Finance: Designed for macroeconomic stabilization

• The World Trade Organization (WTO)

– Trade: Designed to oversee a set of generally accepted rules for world trade

• The World Bank

– Development: Designed to fund specific development projects

• The IMF and the Bank are known as the international financial institutions (IFIs)

Comparing the IFIs and the WTO

• Location

– IFIs in Washington, WTO in Geneva

• Governance and voting structures

– IFIs have weighted voting structures, the WTO requires consensus

• Leadership

– The WTO leader chosen by consensus

– IFI leaders chosen by tradition

• IMF led by a European, World Bank led by an American

• Output

– The IFIs mostly produce loans and reports, the WTO mostly produces rules

• Scale

– The IMF has a staff of 2,650 people, annual costs of $600 million, and has $17 billion in loans outstanding

– The WTO has a staff of 600 people, an annual budget of $155 million, and doesn’t make loans

The IEIs as Regimes

• Transaction costs

– The WTO as a forum for negotiations

– The IMF as a credit-rating agency

• Information flows

– Creating reporting standards

– Doing independent research

• Property rights

– Creating specific rules and dispute-settlement mechanisms

• Legitimacy

– The WTO and rule-governed trade

– The IMF and conditionality

• Value-creation

– The Washington Consensus

• Interest-creation

– Loans and indebtedness

The IEIs as Actors

• The IFIs as actors

– Strong control by major donors

– Large scope for independent action

• The WTO as an actor

– Less control by major member countries, but with less scope for independent action

Challenges for the IEIs

• The WTO

– Deadlock

– Alternative models of trade cooperation

• The IMF

– Cash flow

– Open international capital markets

The Seattle Phenomenon

• The IEIs and global civil society

• Who is a part of the Seattle Phenomenon?

• The IEIs and legitimacy

– The IEIs and democracy

– What happens when the IMF and World Bank start to disagree with each other?

Other International Economic Institutions

• The ECOSOC regional commissions

• Functional specialized agencies

– E.g. the ICAO, the IMO, the ITU, the UPU, and the other WTO.

– Deal with technical standards more than with political issues

• The World Intellectual Property Organization (WIPO)

– Becoming more important

– Home to 21 treaties

• many signed mostly by developed countries

• The Organization for Economic Cooperation and Development (OECD)

– A group of mostly developed countries

– Not a part of the UN system

– Does mostly research and standards-setting

– Beginning to get more involved in generating broader patterns of cooperation

• Anti-bribery convention

• The Multilateral Agreement on Investment (MAI)