The Bretton Woods 75th anniversary coincides with accelerating angst regarding rising populism and growing backlash against multilateralism. To survive and thrive for another 75 years, the Bretton Woods institutions1 must successfully address two new existential challenges: (i) geopolitical rebalancing and (ii) technology-powered decentralization.
Economic interdependence underpinned by the Bretton Woods system has served the globe well. It re-built war-torn economies, raised millions out of poverty so far, facilitated the integration of post-Soviet economies into the global system, provided a platform for peaceful discussion of global imbalances, and delivered financial support to countries in crisis. The system is not perfect, particularly with respect to crisis finance. However, the counterfactual (a world without the Bretton Woods institutions) illustrates the importance of not over-stating the negatives.
Many could be forgiven for mistakenly romanticizing the Bretton Woods moment as a bygone era of cross-border harmony establishing multilateral entities which operate independently of national sovereigns. Reality is more complicated. Multilateral institutions are governed by sovereigns, they are not independent of sovereigns2. The Bretton Woods system was controversial from the beginning as the recently published Bretton Woods transcriptsand a recent book illustrate. Existential questions about the Bretton Woods institutions have periodically arisen, usually during crises. Policy priorities have shifted over time – amid controversy and debate — from centrally planned economic policy during the war years to free-market economics during the Cold War.
In sum, the Bretton Woods system has not always been easy or pretty, much less harmonious or linear.
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