The Bretton Woods Institutions: Evolution, Reform, and Change

Abstract

The Bretton Woods institutions (BWIs), the International Monetary Fund (IMF), and the World Bank were created to bring about orderly development of the world economy in the post-World War II era. This chapter makes an attempt to suggest broad directions of reform. It employs historical and institutional approaches in trying to understand the sources of failures and limitations of the BWIs. A detailed blueprint for reform would require much technical and analytical work on specific issues, but at this stage, it is more important to forge a consensus on the direction of reform. The chapter reviews the evolution of the BWIs, identifying the main driving forces behind the changes in the role and functions of the system, and discusses institutional reform, including the reform of governance and conditionality. In addition, the chapter discusses how to redefine the roles of the BWIs.