World War Two For Supporting Sovereign State Solvency As Well As Coordinating Global Trade And Finance?

1398 Words Nov 24th, 2014 null Page
i. What mechanisms were created after World War Two for supporting sovereign state solvency as well as coordinating global trade and finance?
When the World War II ended, the economy of many countries of Europe was devastated, so it was necessary to create viable systems or plans which would help to these economies recovering. Besides the Marshall Plan, which was a program created by the American government after World War II to help European states recovering, the international community created the Bretton Woods institutions. The meeting held in Bretton Woods in 1944 was the occasion in which the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD; actual World Bank) and the General Agreement on Tariffs and Trade (GATT) were created ( Lamy and Baylis 350). These three institutions were created to change global economic and trade order (Lamy and Baylis 349). However, each institution had a special purpose. The IMF was created to ensure that central banks of countries maintain fixed exchange rates and provide financial support to the countries facing an ephemeral crisis (U.S department of State and Lamy and Baylis 349). Even though the IBRD was another financial institution, its main purpose was to enhance private investment, reconstruct Europe and support development in other countries (Lamy and Baylis 350). Countries had the necessity to trade freely in the international system; it motivated many countries to join GATT,…

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