1.
Bretton Woods institutions are the International Monetary Fund and the World Bank, which is leading the international monetary and financial institutions, the most important element of the modern institutional structure of international monetary relations (Claude, Sharp and Egger, 2016). They got their name from the American town of Bretton Woods, where in 1944 an international monetary and financial conference at which it was decided on the establishment of these two institutions.
The International Monetary Fund is an international monetary organization whose purpose is to promote international trade and monetary cooperation by establishing norms regulating exchange rates and monitor their compliance, improvement of the multilateral system of payments by Member States of foreign currency to equalize the balance of payments (Claude, Sharp and Egger, 2016).
International Bank for Reconstruction and Development is an interstate investment institute whose purpose is to assist member countries in developing their economy by providing long-term loans and loans to guarantee private investments. The International Development Association was established in 1960 as a branch of the World Bank to provide financial support to the least developed countries on more liberal principles than those proposed International Bank for Reconstruction and Development (Claude, Sharp and Egger, 2016).
General Agreement on Tariffs and Trade is an international organization that operates from 1948 under the contract and has three functions: foreign influences public policy through the development of international trade rules; a forum for negotiations, which promote liberalization and predictability in trade relations; arrange settlement of disputes (Claude, Sharp and Egger, 2016). The World Trade Organization is a new international organizational structure, which is based on GATT, results of previous agreements and the agreements reached in the Uruguay Round and entered into force on January 1, 1995 (Claude, Sharp and Egger, 2016). In order to improve the status of international trade rules, openness trading system Uruguay round decided that GATT is a permanent body which deals with the sale of goods, services and intellectual property rights, and the World trade organization will implement the agreements of the last round of negotiations.
2.
During World War II the US economy was not affected, but the economic conditions of Western Europe and Japan were seriously damaged. The financial costs of these countries for the war amounted to $962 billion, and material costs of about $4 trillion (Bohanon, 2012).
The Marshall Plan implementation appeared to be the apparent impetus for the Western countries’ growth. The expansion of the market was the first important condition for this growth. People incomes grew up as well as the overall level of consumption. No wonder the prices for durable goods increased accordingly (such as cars, houses, TVs, washing machines, etc). The rapid development of international trade also became one of the significant factors of the European economic boom (Bohanon, 2012). Subsequently, this had caused an internationalization of economic life and made European countries’ companies to focus on a product’s technical and quality level, otherwise it would not be competitive enough in the global market. Western Europe had become an important center of the world trade (Bohanon, 2012).
Western part of Europe significantly changed after the economic boom during 1950-60s. It happened to mostly industrialized country and yet the overall growth was followed by the development of technological production and, consequently, reduced the agricultural production share in the market. Such industries as radio engineering, biochemistry, aviation, electronic and others played a dominant role in the mass industrialization of Western Europe (Bohanon, 2012). At the same time, traditional industries (e.g. steel, textiles, coal) were less effective and productive.
In addition, those countries that assisted the IMF and the World Bank, put two main requirements for gaining the credits for further development: market reforms and stable political situation. Fulfilling these requirements allowed other countries to receive credits with the interest rate under five-six percent per annum. It was considered as vertical integration and it had several dimensions: military, political, and economic. It had been actively developing since the early 50's and has the most success in Europe (EU, Council of Europe, NATO, etc.) (Bohanon, 2012).
3.
Neoliberal model, according to many experts, significantly limited range of tools to stimulate economic growth, available to governments in developing countries. According to the principles of Washington Consensus”, countries in transition followed a policy of currency, board" that caused the deformation of monetary policy to reduce the level of control of many parameters (Huang, 2010). From time to approach the IMF were found significant shortcomings in assessing the situation and provide assistance in overcoming the consequences of the financial crisis transition countries. According to experts, there were shortcomings in:
Underestimation capacity, rapid spread of the financial crisis from one country to the other;
Focusing on the state of the public finances and underestimation of stability of the financial sector, the national currency, the current account deficit and weaknesses of corporate governance as factors of the crisis;
Ineffectiveness of individual (recommended IMF) programs to overcome the crisis and the lack of measures to combat its devastating consequences;
The absolute benefits of liberalizing capital flow and ignoring any possible risks. The practice has proved that these benefits are possible only under conditions of macroeconomic stability, including the correct choice of monetary policy, exchange rate regime adequate and appropriate level of stability of the financial system;
Underestimation of the consequences of the introduction of fixed exchange rates in the mechanism of the emergence and spread of financial crises, the role of exchange as collateral guarantees from the government and private borrowers at the same time one of the factors of moral hazard;
Increasing politicization and excessive indoctrination of the IMF, manifested in shifting the focus of maintaining stability of the global financial system to its adaptation to liberal macroeconomic concepts (Huang, 2010).
Given this, another noteworthy model of economic development, which is considered as an alternative to the "Washington consensus" - "Beijing Consensus". The important tenets of the doctrine of "Beijing consensus" is to increase the share of GDP redistributed by the state, and increased state control over a private capital, though not rule out the public-private partnership (Huang, 2010).
References
Bohanon, C. (2012). Economic Recovery Lessons: Post World War II Period. Mercatus Center: George Mason University. Retrieved from http://mercatus.org/publication/economic-recovery-lessons-post-world-war-ii-period
Claude, I., Sharp, W., & Egger, R. (2016). International Organization. Encyclopedia.Com. Retrieved from http://www.encyclopedia.com/topic/International_organization.aspx
Huang, Y. (2016). Debating China’s Economic Growth: The Beijing Consensus or The Washington Consensus. Academy Of Management Perspectives. Retrieved from http://neeley.tcu.edu/uploadedfiles/academic_departments/management/zol002102933p.pdf
