ABSTRACT
Introduction The growing instability of the world financial system has been highlighted by the 1997 Asian crisis. It is now over fifty years since the last comprehensive attempt to draw up a blueprint for a stable international economic regime. The Bretton Woods Agreement, conceived in wartime but looking forward to the problems of the post-war world, provided a relatively successful framework for world trade and payments for a quarter of a century. But the break-up of the post-war fixed exchange rate system and financial globalisation mean that a new international system is well overdue. The two main Bretton Woods institutions (the IMF and the World Bank) have survived and partially adapted to new circumstances; and a series of piecemeal agreements on trade and investment have established a new liberal trade and payments regime. But there has been no comprehensive attempt to establish a structure of international economic institutions and rules appropriate to current conditions. As a consequence the world economy is threatened by dangerous disruption with untold potential for damaging individual lives and democratic institutions. This is a danger not just for vulnerable developing countries, but also for the advanced industrial economies in Europe and North America whose industrial strength has gone hand in hand with the growth of complex and delicate financial inter-relationships.
