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A Bretton Woods moment? The 2007-2008 crisis and the future of global finance

ERIC HELLEINER
International Affairs (Royal Institute of International Affairs 1944-)
Vol. 86, No. 3, Global economic governance in transition (May 2010), pp. 619-636
Published by: Wiley on behalf of the Royal Institute of International Affairs
Stable URL: http://www.jstor.org/stable/40664271
Page Count: 18
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A Bretton Woods moment? The 2007-2008 crisis and the future of global finance
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Abstract

The 2007—2008 global financial crisis encouraged speculation about the prospects for a 'Bretton Woods moment' in which the global financial system would be radically redesigned. Many of those hoping for this outcome have since become disillusioned with the limited nature of the international financial reform agenda. But the success and innovation of the Bretton Woods conference was made possible by unique political conditions that are not present today, notably concentrated power in the state system; a transnational expert consensus; and wartime conditions. Moreover, a close reading of history reveals that the Bretton Woods system did not emerge from a single moment but rather from a much more extended historical process. If a new international financial system is being born today, it will be a slower and more incremental development process that can be divided into four phases: a legitimacy crisis; an interregnum; a constitutive phase; and an implementation phase. Viewed from this perspective, post-crisis developments look more significant. The crisis of 2007—2008 has already intensified twin legitimacy crises relating to international financial policy and leadership. It has also generated an international reform initiative that has been unusual for its speed and internationally coordinated nature. Many of the details of this reform initiative remain unresolved and its content and breadth are hotly contested in various ways. We thus find ourselves in more of an interregnum than a constitutive phase. It remains unclear how quickly, if at all, the latter might emerge and in what form.

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