Global Governance Institutions Sara Hsu

Global Governance Institutions: a parable

The threat to globalization is not the wasted American dollars but Washington's readiness to mix US commercial interests with its self-appointed role as global protector. -- William Greider The world is governed by institutions that are not democratic - the World Bank, the IMF, the WTO. -- Jose Saramago

Definitions Global governance: Global governance is the political and economic interaction of transnational actors aimed at solving problems that affect more than one state or region. Usually there is no “hard” power of enforcing compliance. The primary institutions of global governance are the United Nations, World Trade Organization, World Bank, and International Monetary Fund.

The United Nations The United Nations is an international organization founded in 1945 after the Second World War by 51 countries committed to maintaining international peace and security, developing friendly relations among nations and promoting social progress, better living standards and human rights.

UN Has 4 Main Purposes To keep peace throughout the world; To develop friendly relations among nations; To help nations work together to improve the lives of poor people, to conquer hunger, disease and illiteracy, and to encourage respect for each other’s rights and freedoms; To be a centre for harmonizing the actions of nations to achieve these goals.

World Trade Organization The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. It does this by: Administering trade agreements Acting as a forum for trade negotiations Settling trade disputes Reviewing national trade policies Assisting developing countries in trade policy issues, through technical assistance and training programs Cooperating with other international organizations

Ten Benefits of the WTO 1. The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government

World Bank Established in 1944, the World Bank is headquartered in Washington, D.C. The World Bank is not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. The World Bank comprises two institutions managed by 188 member countries: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), reducing poverty in middle-income and creditworthy poorer countries, and in the world’s poorest countries respectively.

World Bank Areas of Focus The Poorest Countries: Many of the UN's Millennium Development Goals for 2015 seem out of reach for the world's poorest countries. An estimated 1.4 billion people survive on incomes of $1.25 or less a day. Middle-Income Countries, Middle-income countries are still home to most of the world’s poor people, often with a heavy concentration in specific regions or ethnic groups.

World Bank Areas of Focus Post-Conflict and Fragile States: Many of the world's poorest countries have faced a vicious cycle of conflict and poverty. Some 80 percent of the 20 poorest countries have suffered a major war in the past 15 years, bringing extraordinary suffering to their people and often affecting the larger region. The Arab World: The Arab world has strong potential for growth and development, but it remains poorly integrated into the global economy apart from the oil sector.

World Bank Areas of Focus Global Public Goods: Global public goods are aspects of development that reach across borders Knowledge and Learning: Poor and developing countries seek the World Bank Group’s expertise as much as they seek its financial assistance. As clients, they increasingly expect integrated solutions to address their particular needs.

International Monetary Fund The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. The IMF provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.

Key IMF Activities The IMF supports its membership by providing policy advice to governments and central banks based on analysis of economic trends and cross-country experiences; research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets; loans to help countries overcome economic difficulties; concessional loans to help fight poverty in developing countries; and technical assistance and training to help countries improve the management of their economies.

Washington Consensus The phrase “Washington Consensus” is often seen as synonymous with “neoliberalism” and “globalization.” These policies were: Fiscal discipline A redirection of public expenditure priorities toward fields offering both high economic returns and the potential to improve income distribution, such as primary health care, primary education, and infrastructure Tax reform (to lower marginal rates and broaden the tax base) Interest rate liberalization A competitive exchange rate Trade liberalization Liberalization of inflows of foreign direct investment Privatization Deregulation (to abolish barriers to entry and exit) Secure property rights

Neoliberalism Neoliberalism is an ideology based on the advocacy of economic liberalizations, free trade, and open markets. Neoliberalism supports privatization of state-owned enterprises, deregulation of markets, and promotion of the private sector's role in society. In the 1980s, much of Neoliberal theory was incorporated into mainstream economics

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