Bretton Woods at 75: A New Multilateralism?

Highlights from our one-day conference on the ‘crisis of multilateralism’ and possibilities for reform to build a more just and ecologically sustainable global economic order.

On the Monday following the World Bank and IMF’s Annual Meetings, BIC partnered with the Bretton Woods Project and the Center for the Advancement of the Rule of Law in the Americas (CAROLA) at Georgetown University Law Center to host a one-day conference reflecting upon the Bretton Woods Institutions’ 75 years. The conference, entitled Bretton Woods at 75 and the Future of Multilateralism, is available to watch in full and with closed captioning, with the program of speakers available. 

The 75th anniversary offers an opportunity for dialogue, given today’s global wave of multilateral fatigue for reasons ranging from nationalist sentiment to cynicism over international financial institutions (IFIs) operating as means for neoliberal policy dissemination, extractivism, and profit for the elites at the expense of those impoverished they intend to help. 

Discussions included how the context has changed since their founding, how the Bank and Fund have evolved, whether or not they have addressed short-comings, lessons learned on the World Bank’s project accountability and citizen engagement. Panelists also discussed possibilities for reforming the international financial system into a more economically just and ecologically sustainable multilateral order that can face today’s global challenges. 

The occasion sparks conversations on human rights and governance, the future of trade, climate change, and visions for reform and a new, more inclusive globalization. Panelists included civil society, social activists from around the world, legal and economic scholars, and former officials from the World Bank, IMF, and the World Trade Organization. The event was widely attended, with the audience including members of civil society, government officials from the US and foreign embassies, youth and veteran activists, academics and researchers, and IFI staff.

Highlights from the day, from among many distinguished panelists, include: 

Alvaro Santos emphasized that, while this is a tumultuous moment including a rebellion against the multilateral system that influenced development throughout the late 20th century, opposition to globalism cannot be captured by the far right-wing; it’s important to remember the resistance of our partners in the global south and amplify their voices.

Vijaya Ramachandran reminded that development is not just about “do no harm” - the mandate is to make people’s lives better. The accountability mechanisms of IFIs need to be improved and their power bolstered. Responsibility shouldn’t end with a final report finding that the Bank did wrong. They need the ability to step in earlier and to compel Management to provide remedy for communities who suffered harm.

Development is not just about “do no harm” - the mandate is to make people’s lives better. The accountability mechanisms of IFIs need to be improved and their power bolstered.
Vijaya Ramachandran

Rick Rowden discussed the major step taken with the establishment of accountability mechanisms starting with the World Bank’s Inspection Panel in the early 1990s after pressure from civil society, but noted their findings do not lead to binding legal obligations for countries or IFI Management. 

Last February, the U.S. Supreme Court made a landmark decision overturning the long-standing assumption that IFIs enjoy absolute impunity from suit. While the narrow decision will likely not open the floodgates to more lawsuits, it could lead to reforms that would fill the current accountability gaps at the institutions. 

On a more macro scale, Rowden argues, free trade and liberal economics under the Washington Consensus has spurred economic growth for millions of people, but also induced or amplified damage to many national economies. Institutions encouraging this model need to consider the people who are left behind. 

Ibithel Abdellatif stated that the Tunisian Commission on Truth and Dignity found that the World Bank and IMF contributed to human rights violations. Tunisian activists have asked the institutions to repair the economic violations suffered by their people, both through compensation for individual victims and cancellation of illegitimate debt on a country level. 

Heron Belfon of Jubilee Caribbean explained the debt-disaster cycle of small island nations, who have not contributed to climate change in large amounts. In the days immediately after a hurricane, they wait for uncertain international aid. In the meantime, a private lender quickly offers a new loan. The country has no option but to accept because there was no cushion in their annual budgets for crisis response to hurricanes. They must recover from the aftermath of natural disasters; simply rebuilding rather than facilitating lasting development. [1]

After a hurricane hit Grenada in 2004, [my neighbors] had 17 people living in a two-bedroom house until their homes were rebuilt. That’s where we need governments to focus their funds and monies after a hurricane, not paying off debt for a bridge that was most likely destroyed by the hurricane anyway.
Heron Belfon

When the World Bank and IMF were established, such large-scale international cooperation for economic development was unprecedented. According to Rebecca Ray, the vision of the founders was “making prosperity global.” Based on Keynesian theory, they created a multilateral structure with the ability to enact drastic change in the global economy by incentivizing private investment in socially desirable ends. 

Confronting climate change is exactly the kind of collective action challenge that the Bretton Woods Institutions were invented to face. They have been vastly unable to get us there in part because of internal co-optation for short term profit by private investors, and in part because we, the outside folks who have been pushing on them as scholars and activists, have been so busy putting out fires—literal and metaphorical—on accountability for climate and environmental injustices done through their practices; that we haven’t been able to really focus on what positive outcomes could happen if these institutions were adequately harnessed and steered.” — Rebecca Ray

Confronting climate change is exactly the kind of collective action challenge that the Bretton Woods Institutions were invented to face.
Rebecca Ray

As a small figure of all foreign aid and investments around the world, why does the World Bank’s position on renewable energy matter? In addition to serving as a forum for multilateral collaboration, Sasanka Thilakasiri of Oxfam America explained the World Bank’s importance as a thought leader on how development should happen, as a knowledge hub through research [2], capacity-building, technical assistance and development policy loans [3] as well as loans for high-dollar projects, thereby approving them as worthy of investment and emulation. 

Currently, the World Bank’s energy portfolio is bifurcated in half between financing for renewable energy, and for indirect financing for fossil fuels. Thilakasiri explains, “the decisions made around these energy investments will either take us where we need to be or—without any hyperbole—are going to doom us all. These deals on the table and conversations happening right now on billions of dollars will set the tone for trillions in infrastructure investments.”

[The World Bank] has an army of economists and scientists to figure out the smart thing to do. But as we know, it’s not a monolithic organization. They can put a great report out but then sometimes the practices don’t match.
Sasanka Thilakasiri

“At the Bank they’re talking about incremental adjustments, whereas what we need is systematic disruptive changes.” says Thilakasiri. 

However, their corporate attitude and adherence to the Wall Street Consensus, as referred to by several panelists, will not allow them to challenge the global financial system which contributes to climate breakdown.

Thilakasiri continued: “They have an army of economists and scientists to figure out the smart thing to do. But as we know, it’s not a monolithic organization. They can put a great report out but then sometimes the practices don’t match.” The one major area where the Bank can create change, beneficial or harmful, is on standards. But there are gaps in implementation, and standards are only as good as how they are implemented.

Is it possible to rebuild multilateralism by harnessing the forces disrupting business-as-usual? The money, the diplomatic structure, and the demand for systemic policy transformation are there. The World Bank has been able to imagine a new style of development and accelerate national policy change before, albeit to less popular ends. Sometimes the problem is the solution. A reformed World Bank learning from its history, using its leverage to incentivize human rights protections and minimize negative impacts, could be hugely powerful. They could raise the bar on sustainable and inclusive development more than ever.

Watch the full conference video with its program of speakers.


[1]  Statement from Jubilee Caribbean: A Call to the Governments of the Caribbean and the International Financial Institutions ahead of the next hurricane season: establish debt relief as an instrument for emergency support and reconstruction. In the annex of Briefing Paper: Before the (next) storm: Debt Relief as a response to Natural Disasters in the Caribbean. March 5, 2018.

[2]  See research by the World Bank such as Turn Down the Heat, studies on the economic gains from climate-smart development, and CEO Kristalina Georgieva's participation at the Global Commission for Adaptation.

[3]  For further reading, see the Urgewald study by Heike Mainhardt, Revealed: World Bank Pumps Billions Into Fossils. April 11, 2019. Updated October 18, 2019. Press release; full report.