Money and Finance 197their detriment, and they have proposed sweeping reforms. However, most developed
nations believe that the current arrangements, imperfect as they may be, are the
best available and that reform schemes are simply unrealistic.
Among scholars, the nature of international monetary and financial relations
raises important analytical issues. As in other arenas, the very rapid development
of globe-straddling international financial markets has led some to believe that
the rise of supranational financial actors has eroded the power of national states.
In this view, international monetary relations essentially serve increasingly to enrich
global international investors and their allies in such international institutions as
the International Monetary Fund (IMF). Other analysts believe that national
governments are still the primary determinants of international monetary and
financial trends. The specific policies of major states toward their own banks and
currencies are, in this view, set in line with national interests; banks and currency
movements are instruments of national policy, and not the other way around. The
tension between a monetary and financial system that is, in a sense, beyond the
reach of individual states and currencies and banks that clearly have home countries
gives rise to a fundamental tension in world politics and in the study of the
international political economy.
NOTE
- These figures are from the International Monetary Fund’s Balance of Payments Yearbook
and International Financial Statistics; from the Bank for International Settlements,
Sixty-third Annual Report (Basel: Bank for International Settlements [BIS], 1993) and
Sixty-eighth Annual Report (Basel: BIS, 1998); and from Jeffry A.Frieden, “Invested
Interests: The Politics of National Economic Policies in a World of Global Finance,”
International Organization 45, 4 (1991): 428.