No abstract

No abstract

The 2007–2008 global financial crisis encouraged speculation about the prospects for a ‘Bretton Woods moment’ in which the global financial system would be radically redesigned. Many of those hoping for this outcome have since become disillusioned with the limited nature of the international financial reform agenda. But the success and innovation of the Bretton Woods conference was made possible by unique political conditions that are not present today, notably concentrated power in the state system; a transnational expert consensus; and wartime conditions. Moreover, a close reading of history reveals that the Bretton Woods system did not emerge from a single moment but rather from a much more extended historical process. If a new international financial system is being born today, it will be a slower and more incremental development process that can be divided into four phases: a legitimacy crisis; an interregnum; a constitutive phase; and an implementation phase. Viewed from this perspective, post‐crisis developments look more significant. The crisis of 2007–2008 has already intensified twin legitimacy crises relating to international financial policy and leadership. It has also generated an international reform initiative that has been unusual for its speed and internationally coordinated nature. Many of the details of this reform initiative remain unresolved and its content and breadth are hotly contested in various ways. We thus find ourselves in more of an interregnum than a constitutive phase. It remains unclear how quickly, if at all, the latter might emerge and in what form.

Economists have explained the 2007-2008 global financial crisis with reference to various market and regulatory failures as well as a macroeconomic environment of cheap credit during the precrisis period. These developments had important political causes that scholars of international political economy (IPE) should have been well positioned to study before the crisis. How well did they anticipate the crisis? Although none foresaw all the causes, a number of IPE scholars correctly identified many of the dangers associated with new models of securitization as well as accompanying regulatory failures and the politics underlying them. IPE scholars were less successful in identifying the macroeconomic roots of the crisis, particularly the role of international capital flows in fueling the U.S. financial bubble, but some scholars did usefully explore the politics that contributed to the latter phenomenon. The study of IPE scholarship in this episode contains useful lessons for the field's future.

This is the unspecified version of the paper.This version of the publication may differ from the final published version. Acknowledgments: For their helpful comments, we are very grateful to two anonymous reviewers and the IO editors. Permanent repository link