LO1-1 The Emergence of Global Institutions

Why are global institutions needed as markets globalize?

To manage, regulate, and police the global marketplace and support multinational treaties.

Over the last 75 years, countries have voluntarily created major institutions to do this: GATT/WTO, IMF, World Bank, UN, and the G20.

How were major global institutions created?

Through voluntary agreements between nation‑states, formalized in international treaties.

What organization replaced GATT?

The World Trade Organization (WTO).

What is the main role of the WTO?

To police the world trading system and ensure countries follow trade rules.

• Helps countries create new trade agreements.

• Has pushed for lower trade barriers, making globalization possible.

How many WTO members were there in 2023, and what share of world trade do they represent?

164 members representing 98% of world trade.

What has the WTO historically promoted?

Lowering barriers to cross‑border trade and investment.

What is a major criticism of the WTO?

Critics say it undermines national sovereignty by limiting countries’ policy freedom.

Why has WTO influence recently weakened?

Many nations are pushing back against what they see as institutional overreach.

When were the IMF and World Bank created?

In 1944 at Bretton Woods by 44 nations.

What is the IMF’s main purpose?

To maintain order in the international monetary system.

What is the World Bank’s main purpose?

To promote economic development through low‑interest loans for infrastructure.

What type of countries does the World Bank mainly assist?

Poor nations needing funding for major infrastructure projects.

What role does the IMF play during economic crises?

Acts as a lender of last resort to countries with unstable economies or currencies.

What is controversial about IMF loans?

They require countries to adopt specific economic policies, seen by critics as inappropriate or sovereignty‑reducing.

When was the UN founded, and how many members does it have today?

Founded in 1945 by 51 countries; now has 193 members.

What treaty governs UN member obligations?

The UN Charter.

What are the four main purposes of the UN?

Peace/security, friendly relations, solving global problems, and promoting human rights.

What percentage of UN work focuses on economic and social development?

About 70%.

What belief guides the UN’s development work?

Eradicating poverty is essential for lasting world peace.

What is the G20 and when was it established?

A group of finance ministers and central bank governors from major economies; established in 1999.

What share of global GDP and trade does the G20 represent?

90% of global GDP and 80% of global trade.

What was the G20’s major role during 2008–2009?

Coordinating global policy responses to the financial crisis and recession.