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The three horsemen of globalization | page 1, 2

The bank and the fund -- both created at the close of World War II as part of an effort to rebuild Europe -- have coordinated their efforts for decades. Developing nations rarely receive loans from the World Bank without satisfying the fund's strict demands for fiscal discipline. A maze of tariff and trade agreements was also forged at the 1944 summit at Bretton Woods, N.H.. But there was no central institution to enforce those deals, and therefore no organization with which the bank or the fund could coordinate their policies, until the General Agreement on Trade and Tariffs was replaced by the WTO in 1995.

The bank and the fund embraced their new sibling at the 1996 WTO ministerial meeting in Singapore, and the three have cooperated unofficially -- by sharing information and policy advice -- ever since.

With this week's agreement, the three horsemen of Bretton Woods come closer to riding in step.

Meanwhile, criticism of each group in the alliance is mounting. A growing number of economists blame IMF policies for both causing the Asian financial crisis. Discord rages within the World Bank in the wake of the resignation of chief economist Joseph Stiglitz, who has concluded that much of what the bank does is not helping the world's poor.

"All three of these institutions have suffered a degrading of their image," says Mark Weisbrot, an economist who co-directs the Washington nonprofit that leaked the World Bank memos.

"There is a real divide within the bank over whether to band together in defense of their traditional agenda of trade and investment liberalization, or whether to admit that mistakes have been made," Weisbrot said.
salon.com | Dec. 2, 1999

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About the writer
Monte Paulsen is a contributor to "The Buying of the President 2000," an investigation by the Center for Public Integrity that will be published by Avon Books in January.

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