Now, Eric Helleiner should be a very familiar name to IPE readers. As his edited volume The Future of the Dollar demonstrates, there is a wide range of opinions on where it is headed. Nevertheless, in a recent UN Conference on Trade and Development (UNCTAD) discussion paper, he makes an number of salient points, First, the Bretton Woods conference was itself a UN-sponsored event. Second, as we often forget, the World Bank and IMF are nominally under the umbrella of the UN system. Thus, UN bodies alike UNCTAD should have a way in how these institutions function. Third, many of the issues we face today--regulating capital flows, accommodating heterodox (read: contra Washington Consensus) policies, and what else have you were also the points of debate at Bretton Woods.As he is writing for UNCTAD, Helleiner is unsurprisingly friendly to causes dear to developing countries. Yes. it's a slant I'm partial to obviously, but he makes several points that require meaningful consideration in any discussion of the subject matter of The Contemporary Reform of Global Financial Governance: Implications of and Lessons from the Past. Here is the conclusion, though the rest is well worth reading:
The G20 leaders’ summit in November 2008 invariably invited comparisons with Bretton Woods. At both meetings there was a shared desire to assert public authority more centrally into the international financial system in the wake of a devastating international financial crisis. But the G20 leaders have so far been much more cautious than their Bretton Woods predecessors in laying out an agenda to achieve this goal. This paper has suggested that the three broad innovations in global financial governance outlined at Bretton Woods may serve as useful road map if policymakers want to set their sights higher: the regulation of international financial markets, the management of global imbalances, and the promotion of international development.
Some of the specific long-forgotten proposals that were discussed during the Bretton Woods negotiations in each of these three categories also deserve reconsideration today, such as those relating to debt restructuring, heterodox fnancial advice for developing countries, and the role of international cooperation in efforts to control capital movements. This is not to suggest that history should simply repeat itself. If the Bretton Woods objectives are to be met in the contemporary context, a number of the proposals they discussed would need to be adjusted to the new economic and political circumstances. Efforts to regulate international financial markets today must go far beyond the border control issues addressed at Bretton Woods to strengthen international prudential rules. For those wanting to curtail speculative international financial flows, the Tobin tax provides a new approach not considered at Bretton Woods. With respect to the management of global imbalances, the Bretton Woods principle that both surplus and deficit countries have shared responsibilities needs to be reinforced via new mechanisms such as an international substitution account, support for domestic currency borrowing in developing countries [instead of in reserve currencies], and new kinds of reserve pooling arrangements at the global and regional levels. The promotion of international development must also be extended to cover the new international prudential regulations being developed.
Important to all these areas is also the need for governance reform to adjust international financial institutions to today’s more decentralized international political environment. At the Bretton Woods conference, United States leadership within the multilateral Bretton Woods institutions was simply assumed. Today, the world is changing in ways that make governance questions a much more important part of the agenda of global financial reform. It is not just a question of giving developing countries more say in the Bretton Woods institutions as well as in the FSF and other standard-setting bodies. Also significant is the need to consider decentralizing international financial governance by assigning more tasks to the regional level. At the same time, greater resort to a principle of subsidiarity via regional arrangements in international financial governance must be grounded within the broad multilateral framework set not just by the Bretton Woods institutions, but also the United Nations system more generally.
This last point deserves special emphasis for those seeking to build a new Bretton Woods. As we have seen, from the very start, United States policymakers in the early 1940s intended the planning for the post-war international financial order to be situated within the larger process of creating the United Nations system. It is no coincidence that the formal title of the Bretton Woods meeting was the “United Nations Monetary and Financial Conference”. In the lead-up to the conference, British policymakers had pressed at various moments for bilateral negotiations, but United States policymakers insisted on a more inclusive multilateral meeting which included not just smaller industrialized countries, but also countries from the non-industrialized world. In the contemporary period, the United States decision to create a summit of the G20 leaders for the first time in November 2008 marked an important effort to be more inclusive of emerging powers in discussions of global fnancial reform. If the goal is to build a new Bretton Woods order, however, the process will need to be embedded within a more representative, inclusive and universal political framework.
