Evaluation of Bretton Woods Institution’s Influence on the Sovereign Decision Making Essay Example for Free

Evaluation of Bretton Woods Institutions Influence on the Sovereign Decision Making EssayTruly our global economy works in complexity as various collaborations and interrelationships happens between countries around the globe. Because of the interaction of different economies, Bretton Woods Institutions were established to guide those growing countries towards the attainment of impressive economic growth through the assistance of genuine countries. twain of the major organizations under the Bretton Wood Institutions would be the populace Bank and International Monetary Fund which provides look into and financial services to developing countries to boost the economic activity of developing countries. Despite of the said gains that World Bank and International Monetary Fund offers to developing countries, a lot of debates concerning the real effects of such intermediation of WB and IMF happening on various parts of the globe. In this regard, the main question that this roo t will about to answer would be what are the effects of Bretton Woods Institutions programs on the sovereignty of developing countries and would there be really benefits that can be derived by developing countries on such initiation of internationalist institutions in the long run?These are some of the questions that we will uncover by the curio of this paper. One of the main programs of World Bank and IMF for the developing countries would be to lend funds that can be used for economic development such as building of various infrastructures like roads and link up that are essential to attract more foreign investors (Fischer et al 2003 4). Aside from this, both of the identified international institutions provides research assistance as to how to deal with various economic jobs such as poverty, high puffiness and unemployment rate as well as stabilizing financial sector of the economy.But the only problem with IMF and WB would be their policy-conditional lending wherein they de mand reforms on various economic policies of developing countries like dishonor tariff rate for United States or higher tax discount on foreign investors from developed countries in exchange for funds. Therefore, to some extent, IMF and WB, influences the economic policies of developing countries by requiring the latter to comply first on IMF and WBs policy reforms before granting those financial aids.Since it is the government that makes economic policies, sovereignty is now at stake every time developing countries borrow silver to MF and WB since the government becomes powerless from the demands of IMF and WB, and just let these international institutions to change whatever economic policies that is currently being implemented. For the past twain decades, IMF and WB have been able to influence every developing country around the globe.Lending money serves as the powerful tool of IMF and WB in successfully penetrating the sovereignty of a attached developing country in exchange for funding. In the short run perspective, every one would consort that IMF and WB are of great help for developing countries. But in the long run, due to their interventions on economic policies of developing countries, there is a tendency that the policy-conditional lending of IMF and WB would not fit to the record of economic activities a certain country has thereby will only cause instability in the next coming years.In this regard, it is already clear that the policy-condition lending of IMF and WB would only provide short lived benefits for the economy of developing countries since negative effects of the said intervention would offset all those benefits. It would be correct if IMF and WB would minimize its interventions on economic policies of developing countries to give room for the latter to have sustainable economic development.