International Economic Institutions
NCERT Class 12 • Fundamentals of Human Geography • Chapter "International Trade" | NCERT Class 11 • Indian Economic Development
International Economic Institutions
After the Second World War a set of institutions was created to keep world trade and finance orderly, because the interwar years had shown how competitive devaluation and trade barriers could deepen a global depression. India is a founding or early member of all of them.
The Main Institutions
- The International Monetary Fund was created to maintain exchange rate stability and to lend to members facing a balance of payments problem.
- Its lending usually carries conditions requiring the borrowing country to correct its deficit and reform policy.
- The World Bank was created to finance reconstruction and later development, lending for infrastructure, agriculture, education and health.
- The World Trade Organization replaced an earlier trade agreement and administers the rules of world trade.
- It provides a forum for trade negotiations and a mechanism for settling disputes between members.
- Its principles include non discrimination between trading partners and the gradual reduction of trade barriers.
- Regional groupings such as free trade areas and customs unions also shape trade alongside these bodies.
Debates and India's Position
- Critics argue that trade rules favour the developed countries, especially in agriculture, subsidies and intellectual property.
- Developing countries have sought better market access and policy space for food security and small producers.
- Supporters argue that a rules based system protects weaker countries better than raw bargaining power would.
- Conditions attached to lending have been criticised for forcing spending cuts that hurt the poor.
- India has used these forums to press for fairer terms while taking part in world trade and investment flows.
- Regional trade agreements have grown as countries seek faster progress than global negotiation allows.
- Membership brings obligations as well as rights, since rules bind the strong and the weak alike.
| Institution | Main Function |
|---|---|
| International Monetary Fund | Exchange stability and payments support |
| World Bank | Development and project lending |
| World Trade Organization | Trade rules, negotiation and dispute settlement |
Conditionality — the set of policy conditions a borrowing country must accept in order to receive international financial assistance.
Exam me kaise aata hai
- Which body lends to countries facing a payments problem — the International Monetary Fund
- Which body finances development projects — the World Bank
- Which body administers world trade rules — the World Trade Organization
- Policy conditions attached to a loan are called — conditionality
UPSC/State PSC ke liye
- A rules based trade system limits the use of raw economic power, which matters most to the countries with the least of it.
- Conditionality is contested because short term fiscal correction and long term development goals can pull policy in opposite directions.
Yahan confuse hote hain
✗ The World Bank and the IMF do the same work | The Bank lends for development; the Fund supports the balance of payments | ✓
✗ The WTO sets domestic tax policy | It administers trade rules between members | ✓
✗ Membership of these bodies removes all trade barriers | Barriers are reduced gradually through negotiation | ✓
Ek nazar me
- The IMF supports exchange stability and payments problems.
- The World Bank lends for development projects.
- The WTO administers trade rules and settles disputes.
- Debates centre on fairness of rules and on conditionality attached to lending.
Ab practice karein
International trade aur BOP se har exam me concept questions aate hain. ExamAtlas ke mock test se abhi practice karein.