The crisis of neoliberalism and the future of international institutions: A comparison of the IMF and the WTO

Abstract

The current crisis of neoliberalism is calling into question the relevance of key international institutions. We analyze the origins, nature, and possible impacts of the crisis through comparing two such institutions: the International Monetary Fund (IMF) and the World Trade Organization (WTO). Both originated in the post-World War II U.S.-led hegemonic order and were transformed as part of the transition to global neoliberalism. We show that while the IMF and the WTO have been part of the same hegemonic project, their distinct institutional features have put them on significantly different trajectories. Historical differences in the two institutions' systems of rules have placed the IMF in a more vulnerable position than the WTO, which provides clues to the future contours of global economic governance.Less than a decade ago, market-liberalizing ideas and policies reigned supreme. Today, however, the popularity of unfettered markets has declined dramatically. Latin America, once at the cutting edge of a global free-market revolution, is now dominated by left-wing governments elected on explicitly anti-neoliberal platforms. Around the world, economists and policymakers have opined that excessive reliance on unfettered markets was the root cause of the current worldwide financial crisis. At the meeting of the Group of 20 (G20) heads of state in the spring of 2009, British Prime Minister Gordon Brown announced the death of "the Washington Consensus"-the famous list of market-liberalizing policy prescriptions that guided the previous 20 years of economic policy (Painter 2009).Yet if neoliberalism is dying, the institutions associated with its rise are not all equally moribund. For example, the global economic crisis has unexpectedly Theor Soc (2009) 38:459-484

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