The Bretton Woods Moment

Abstract

As the 2007–2008 global financial crisis became increasingly severe, many analysts speculated that it might generate a new 'Bretton Woods moment'. 1 Even politi-cians such as French President Nicolas Sarkozy and British Prime Minister Gordon Brown held out the hope of a 'new Bretton Woods' in the lead-up to the first G20 leaders' summit in November 2008. 2 These sentiments were understandable. This crisis was the worst since the Great Depression that helped set the stage for the remarkable 1944 Bretton Woods conference at which a constitution for the postwar international financial system was agreed. Would this momentous crisis inspire policy-makers once again to seize the opportunity and build a new global financial system? We have indeed seen some innovations in global financial governance emerging from this crisis. But many of those hoping for a new Bretton Woods have been disappointed. They argue that policy-makers have so far failed to act in the kind of ambitious ways that the situation required. In the words of a Financial Times editorial in late December 2009, 'even after the worst financial and economic shock since the Depression, and much grand talk of a new Bretton Woods, little reform has happened … The crisis has not produced a new world order.' 3 The 'Bretton Woods test', it seems, has been failed. In this article, I argue that critiques of this kind set the bar too high. The success of the Bretton Woods conference was a product of a remarkable combination of concentrated power in the state system, a transnational expert consensus and wartime conditions. The absence of a similar political environment today makes its accomplishments very difficult to replicate. Even more important, the signifi-cance of the Bretton Woods conference itself should not be overstated. Not only did the innovative aspects of the conference agreements have long historical roots,