Abstract

BUIRA, Ariel. The Institutions of Bretton Woods: Government without Legitimacy?. Economía UNAM [online]. 2007, vol.4, n.10, pp.30-61. ISSN 1665-952X.

Sixty years after their inception, the institutions of Bretton Woods are going through a crisis of legitimacy that damages both their credibility and their effectiveness. The root of this crisis is the non-representative nature of their structure of government, which places the control of the institutions in the hands of a small group of industrialized countries that consider developing countries and the economies in transition as junior partners despite the fact that they represent in real terms more than half the world's output and the majority of its population and include the most dynamic economies and the main holders of international reserves. With time, the effects of the Bretton Woods institutions' non-representative nature have been aggravated by two trends. In the first place, a growing divide between member countries: on the one hand are the industrialized, creditor countries, which are not borrowers but do decide for the most part policy and norms, and, on the other hand, the developing countries, current or potential debtors subject to the policies and norms formulated by others. The second trend is the rapid increase in both the size and importance of the economies of the developing countries, particularly those with emerging markets, in the world economy. This trend has meant that the institutions' structure of government, which reflects the political agreement reached at the end of World War II, is becoming more and more obsolete.