ABSTRACT
This chapter examines the problems associated with the coordination of an increasingly interdependent international economy, the politics of economic problem-solving, and the various regime-building efforts that have been undertaken. Historical drama has played out not only within states but on the international stage as well, where it has shaped the evolution of international economic regimes. There are three main schools of thought about the role of states and markets in the international economy: mercantilism, liberal internationalism, and Marxism. Trends in private foreign investment flows have followed the pattern of trade flows. Free trade exposes workers to greater risk of job loss and hence can place more demands on government to help globalization's losers with unemployment insurance, retraining, and other programs. The General Agreement on Tariffs and Trade was created after Second World War as the key trade component of the Bretton Woods system, designed to provide the forum for bargaining over and expanding free trade.
