LIBERALISM – INSTITUTIONAL LIBERALISM

 

Institutional liberals think that international-wide approach is required to reinforce the functioning of the market, and they like the development of strong international institutions such as the WTO, IMF, and World Bank.

In the wake of international or regional crisis, international institutions are more often talked about in solving major problems like things that cannot be addressed effectively at the domestic level. They can contribute to the provision of global public goods. There is some debate about what ‘public good’ is but it is generally recognized that it can be consumed without depriving another of that good, and protect the environment like undertaking to improve air quality or combating climate change at the global level.

 

Financial stability can definitely be seen as international public good because financial instability is a potential public bad that spreads across countries. All countries have an interest in an economic and financial system that is more or less ‘stable’. So Stability of the global economic system seems to be requested by those countries.

But Realists are critical of international organizations because they only serve the voices of big countries like the U.S. and the E.U. For example, the influence of the developed countries is  bigger in the IMF or World Bank because they contribute more money to those.

How can it be addressed to minimize the voices of the big countries while maximizing the presence of under developed countries that don’t have much to contribute to those I.O.?

I guess it’s inevitable to prevent those big countries from having more powers but emerging markets can be powerful as well in the way they form regional organization like ASEAN.

In that way, those ‘weak’ countries express their voices and influence the way the bodies go.