The G7, IMF and Financial Crisis Management in the '90s
Date Issued
2010
Date
2010
Author(s)
Wang, Yu-Chieh
Abstract
The study of power has been the main focus for the students of international relations. The author, through the realist view and the inclusive concepts of power, reviews the role and the position of the G7 meeting in the international political economy(IPE) in the ‘90s. After the collapse of the Bretton Woods System in the early ‘70s, the G5/G7 meeting began to steer the development of the IPE, which was dominated by the U.S. in the past, and form the exclusive center within the International Monetary Fund(IMF). In fact, the political bias in the IMF and the gradual institutionalization of the G7’s meetings enable the G7 to lead the development of the IMF and to govern the international monetary and financial affairs through the IMF. This is obviously true in the ‘90s when the IMF undertook the third amendment to Articles of Agreement, quota reviews, organizational adjustments, and the establishment of financing facilities. Even at the time of financial crises, the G7 not only delt with these crises through the IMF so as to stabilize the financial order and mitigate the chaos of financial system, but also managed them in favor of their national interests in order to maintain the current structure of the IPE which advatages the interests of powerful stataes. Therefore, the author argue that there is a structure in which the G7’s meeting and the IMF have formed a vertical division of labor in the financial affairs, and that the structure, in consideration of the international reality, is stable enough for the G7 to meet the criticism presented by the developing countries. However, a number of internal and external obstacles bother G7’s cooperation, and the political leadership that roll the IMF on may produce less than enough if the G7 cannot come to a compromise on certain issues. In conclusion, if the G7 can keep on demonstrating their power effectively and stabilizing the international financial order, they will keep their dominance in the current structure of the IPE; on the contrary, if the G7 are unable to bear the burden of maintaining the international order and to deal with the incessant challenges presented by the developing countries whose economic power continues growing, they will hardly meet the criticism of legitimate deficiency and hand over the leadership of the IPE to another leading body like U.S. did in the ‘70s. On that day, the systemic bias within the IPE will be very different from what it is today.
Subjects
Power
G7 meeting
IMF
Bias
Financial crisis management
Type
thesis
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