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International economic structures, government interests, and international coordination of macroeconomic adjustment policies

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  • Webb, Michael C.

Abstract

Analysts have commonly argued that there has been a decline in international coordination of the kinds of policies that governments can use to manage the international payments imbalances that emerge when different governments pursue different macroeconomic policies. The decline typically has been attributed to a posited decline in American hegemony. In contrast, this article argues that international coordination of macroeconomic adjustment policies (trade and capital controls, exchange rate policies, balance-of-payments financing, and monetary and fiscal policies) was at least as extensive for much of the 1980s as it had been in the 1960s. There was, however, a shift away from coordination of balance-of-payments financing and other policies that have limited direct consequences for domestic economic and political conditions and a concurrent shift toward coordination of monetary and fiscal policies that are critically important for domestic politics and economics. This change is best explained as a consequence of changes in the structure of the international economy. Most important, international capital market integration encouraged governments to coordinate monetary and fiscal policies because balance-of-payments financing and exchange rate coordination alone are insufficient to manage the enormous payments imbalances that emerge when capital is able to flow internationally in search of higher interest rates and appreciating currencies.

Suggested Citation

  • Webb, Michael C., 1991. "International economic structures, government interests, and international coordination of macroeconomic adjustment policies," International Organization, Cambridge University Press, vol. 45(3), pages 309-342, July.
  • Handle: RePEc:cup:intorg:v:45:y:1991:i:03:p:309-342_03
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    Cited by:

    1. Lütz, Susanne, 1996. "The revival of the nation-state? Stock exchange regulation in an era of internationalized financial markets," MPIfG Discussion Paper 96/9, Max Planck Institute for the Study of Societies.
    2. John S. Odell, 2003. "Making and Breaking Impasses in International Regimes. The WTO, Seattle and Doha," EUI-RSCAS Working Papers 1, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    3. S Corbridge, 1994. "Bretton Woods Revisited: Hegemony, Stability, and Territory," Environment and Planning A, , vol. 26(12), pages 1829-1859, December.
    4. William R. Clark & Mark Hallerberg & Manfred Keil & Thomas D. Willett, 2012. "Measures of financial openness and interdependence," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 4(1), pages 58-75, April.
    5. Russell Jesse R., 2012. "Disequilibrium in the International Balance of Payments," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 18(1), pages 1-17, May.

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