Page 1 of 32
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 9
September 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 184
The International Monetary Fund, the Search for a New
International Economic Order
Oyedotun Omoteye & Ajaja, O.B
1Legal Research Assistant, Judicial Service Commission
arabellaomot61@gmail.com
2Department of Business Education, College of Education, Ikere Ekiti. Ekiti State. Nigeria
E-mail: kayodeajaja3@gmail.com
Abstract
The continuous search for New
International Economic Order has created
an opportunity for the emerging economies
to join the “table” where global economic
policy is decided. While it is true that the
appearances of the emerging economies on
the “table” are new to the extent that such
economy never existed or represented when
the International Monetary Fund was
established in 1944; however, developing
countries were present at the negotiations
that led to the creation of Bretton Woods
Institutions. This paper is set to give account
of the evolution of developing and emerging
economies’ voice at the various global
economic and financial decision-making
fora, focusing primarily on IMF. The paper
will also address the role of developing
countries in the establishment of the Bretton
Woods Institutions in 1944. In this paper,
focus will also be placed on New
International Economic Order (NIEO): an
unsuccessful post-decolonization movement
that sought to give developing countries a
meaningful voice in international economic
matters, including demands to give
developing countries more influence in the
Bretton Woods Institutions. The rise of IMF
Structural Conditionality in the 1980s will
also be examined as a tool the Fund used to
impose Neoliberal reforms on developing
and transitioning countries. A section of this
paper explains how the global financial
crisis of 2008 has finally given “emerging
economies” an opportunity to acquire what
could become a significant voice in
international monetary and financial law
and policy. In concluding this paper, it is
noted that the global financial crisis
provides the emerging economies (and to a
lesser extent the developing economies) an
important opportunity to develop a voice in
global economic and financial matters.
Page 2 of 32
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 9
September 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 185
1. Introduction
The global financial crisis of 2008 has had a
profound impact on the conceptions that
have informed economic and financial
frameworks on the national and global level.
Policymakers now believe that unregulated
financial innovation is highly suspect.1
Economic and financial deregulation no
longer enjoys an exalted status. The efficient
market hypothesis has come under fire.2 The
flaws of global standard setting, such as the
capital adequacy standards promulgated by
the Basel Committee on Banking
Supervision, have been exposed.3
1 Carrasco E. R., “The Global Financial Crisis and
the Financial Stability Forum: the Awakening and
Transformation of an International Body” (2010),
Transnational Law and Contemporary Problem, Vol.
19, pp. 101 -102. [Electronic copy available at:
http://ssrn.com/abstract=1543508 (accessed on
25/03/2015)]
2
Justin F., “The Myth of the Rational Market: A
History of Risk, Reward and Delusion on Wall
Street.” Available at:
www.nytimes.com/2009/08/09/books/review/Krugm
an-thtml?pagewanted=all&_r=0 (accessed on
25/03/2015)]
3 Tarullo D. K., “Banking on Basel: the Future of
International Financial Regulation” (August, 2008)
Peterson Institute for International Economics:
Washington DC, p.16. [Electronic copy available at:
The crisis has also ruptured the global
economic order. The United States and
Europe, the rulers of the global economic
order since World War II, have struggled to
recover from the crisis. By contrast, most
emerging and developing economies
rebounded relatively quickly over the past
year.4 More importantly, the continuous
search for New International Economic
Order has created an opportunity for the
emerging economies to join the “table”
where global economic policy is decided.
This opportunity is about “voice” i.e.
effective and meaningful representation of
emerging and developing economies at the
various for a that discuss and agree upon
global economic and financial policies.
www.books.mec.biz/download/Banking_on_Base_/N
DgyOTk4oTIy (accessed on 25/03/2015)]
4 Chuan L., “What are the Emerging Market? (2010).
Available at:
www.ebook.law.uiowa.edu/edu/ebook/faqs/what_are
_the_emerging_market (accessed on 16/01/2015).
The difference between emerging and developing
economies is often blurred. For purposes of this
Paper, an emerging economy differs from a
developing country to the extent that the former has
undertaken significant economic reforms that are
transforming it into a fast-growing, dynamic
economy with a regional and even global economic
presence.
Page 3 of 32
Journal for Studies in Management and Planning
Available at
http://edupediapublications.org/journals/index.php/JSMaP/
e-ISSN: 2395-0463
Volume 02 Issue 9
September 2016
Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 186
While it is true that the voices of the
emerging economies are new to the extent
that no such voices existed or represented
when the International Monetary Fund5 was
established in 1944; developing countries
were present at the negotiations that led to
the creation of Brett on Woods
Institutions.6Moreover, developing countries
were the instigators of the push for a New
International Economic Order (NIEO) in the
1970s. Thus, prior to the global financial
crisis, industrialized countries heard the
voices of developing countries. But they
ignored them.7 So to the extent that
developing and emerging economies lacked
effective and meaningful voice in the global
economic order.
5 Hereinafter referred to as IMF or Fund
6 The Bretton Woods Institutions are the World Bank
and International Monetary Fund. Thay were set up at
a meeting of 43 countries in Bretton Woods, New
Hempshire, USA in July, 1944. See :
www.brettonwoodsproject.org/2005/08/art-320747
(accessed on 25/03/2015)
7Towards the New International Economic Order,
(1982) (Analytical Report on Developments in the
Field of International Economic Cooperation since
the Sixth Special session of the General Assembly)
pp. 4-5. Available at:
www.unesdoc.unesco.org/images/0003/000358/0358
06eo.pdg (accessed on 16/01/2015)
This paper is set to give account of the
evolution of developing and emerging
economies’ voice at the various global
economic and financial decision-making for
a, focusing primarily on IMF. The paper will
also address the role of developing countries
in the establishment of the Bretton Woods
Institutions in 1944, at the Bretton Woods
Conference, noting that the main players at
the conference, the UK and the USA,
marginalized development issues. In this
paper, focus will also be placed on New
International Economic Order (NIEO): an
unsuccessful post-decolonization movement
that sought to give developing countries a
meaningful voice in international economic
matters, including demands to give
developing countries more influence in the
Bretton Woods Institutions. The rise of IMF
Structural Conditionality in the 1980s will
also be examined as a tool the Fund used to
impose Neoliberal reforms on developing
and transitioning countries. Absurdity of
IMF Structural Conditionality Reform in
Asia in 1990s attracted criticism that
countries borrowing from the IMF lack
ownership over the reforms.
A section of this paper explains how the
global financial crisis of 2008 has finally
given “emerging economies”—which did
