Resetting the International Monetary (Non)System

Abstract

This book provides an analysis of the global monetary system and the necessary reforms that it should undergo to play an active role in the twenty-first century. As its title indicates, its basic diagnosis is that it is an ad hoc framework rather than a coherent system—a ‘non-system’—which evolved after the breakdown of the original Bretton Woods arrangement in the early 1970s. The book places a special focus on the asymmetries that emerging and developing countries face within the current system, and therefore on the development dimensions of the global monetary system and of global monetary reform. The book proposes a comprehensive yet evolutionary reform of the system that includes: (i) provision of international liquidity through a system that mixes the multi-currency arrangement with a more active use of the IMF’s Special Drawing Rights (SDRs), the only true global currency that has been created; (ii) stronger mechanisms of macroeconomic policy cooperation, including greater cooperation in exchange rate management, and freedom to manage capital flows as a complement to counter-cyclical macroeconomic policy and other instruments of financial regulation; (iii) additional automatic balance-of-payments financing facilities, and the complementary use of swap and regional arrangements; (iv) a multilateral sovereign debt workout mechanism; and (v) major reforms of the system’s governance, based on a more representative apex organization, more equitable participation of emerging and developing countries in decision-making, and a network of global, regional, inter-regional, and sub-regional organizations.

Desindustrialización, desindustrialización "prematura" y "síndrome holandés"

“…De acuerdo con dicho teorema (Lipsey y Lancaster, 1956), "si una restricción [...] impide el logro de una de las condiciones paretianas, las otras, aunque todavía inalcanzables, ya no son deseables" (énfasis y traducción nuestros). En otras palabras, dadas las características del mundo en que vivimos, las políticas de tipo first best, en lugar de llevarnos a un óptimo, nos terminan dejando muy lejos de un second best; las crecientes distorsiones y fallas de mercado en el sistema financiero son otro fenómeno que nos debería hacer repensar todo el paquete de políticas económicas (véase Ocampo [2017]).…”

Leaving the Nest: The Rise of Regional Financial Arrangements and the Future of Global Governance

“…Henning and Walter (: 22) argue that existing, developed country multilateral institutions should work to improve ‘the level of accommodation’ and that ‘active measures are required to achieve this’, while conceding that improvements to the global financial governance system could be hindered by divergent interests between states. Likewise, Ocampo argues that the financial architecture for global liquidity should be conceived as IMF‐led, with the IMF ‘as the apex of a network of regional reserve funds rather than a mere global fund’ (Ocampo, : 200).…”

Continuity, Discontinuity and Incoherence in the Bretton Woods Order: A Hirschmanian Reading

“…Representatives of the BRICS countries (Brazil, Russia, India, China and South Africa) argued that the BWIs lacked legitimacy and did not reflect the dispersal in power associated with the rise of the global South and East (Chin, ). Building on earlier work, Ocampo (, : Ch. 6) argued for systemic reconstruction involving a multi‐tiered, layered GFA with a representative Group of 20 (G‐20); BWIs that reflect the voices of countries known as emerging markets and developing economies (EMDs); and regional and sub‐regional financial institutions that mediate between global and national institutions and regulatory bodies.…”

“…My normative stance on incoherence breaks sharply with the embrace of coherent systems, architectures, models — in short, of a singular weltenshaung — that mark many social science traditions, especially economics (Grabel, ). Indeed, some such as Ocampo () (following Triffin and others) see the period from the breakdown of Bretton Woods to the present as an interregnum in which a ‘(non)system’ has evolved through ad hoc processes. In Ocampo's view the deepening incoherence of the present moves the global monetary system toward further dysfunction, which is particularly detrimental to EMDs.…”