Not Yours or Mine, But Ours
“What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.” — Adam Smith
This week’s Spring Meetings of International Monetary Fund (“IMF”) and the World Bank Group (“WBG”) bring global leaders to Washington to confront urgent global challenges: economic volatility, climate shocks, and uneven development. At the heart of these discussions lies one core principle, global coordination.
When the 45 nations convened in 1944 in Bretton Woods, New Hampshire, they were facing an incredibly fragmented world, with post-WWII reconstruction taking center stage. Today’s world is arguably just as fragmented, though in new ways. But then as now, navigating this fragmentation required not conformity, but coordination. While both the IMF and WBG are far from perfect, they remain the world’s last truly global conveners. And the best forum to ensure the global challenges are tackled collectively, rather than ad hoc.
The real risk is not in the irrelevance of these organizations, but in retreat from them. Both institutions were designed to align interests, not erase them. Their value lies not in a perfect track-record, but in concerted solutions where all nations agree. The Bretton Woods institutions are not utopian. They are universal. And it is always better to be in the tent, rather than sitting outside all alone in the dark.
Coordination, Not Constriction: The Case for Universality
“We are all in it together, kid” — Archibald "Harry" Tuttle (Robert De Niro) in Brazil.
There is a long-lasting debate in economics surrounding monetary or political unions, and whether they are building blocks or stumbling blocks. Do they foster greater integration, or greater division. Optimists will tend towards integration, and pessimists towards division. But as we face a more fragmented world, the need for coordination has never been greater.
The emergence of the BRICS Bank, the Asian Infrastructure Investment Bank, the Belt and Road Initiative, the continued prominence of the G7 and the G20, the role of the regional development Banks such as the African Development Bank, the Asian Development Bank or the Inter-American Development Bank, and the plethora of other existing international forums, underscore the growing risk of institutional incoherence. But the challenges they face collectively, be it rising sovereign debt, volatile capital flows, or climate change, to name a few, still require multilateral anchoring. Indeed, the impacts of each one of these issues are global, and affect the entire population at large. Replacing something flawed with something untested may feel seductive. But stability is often the stronger foundation.
While the current U.S. Administration has decided to take stock of its involvement with International Organizations and International Financial Institutions (including of course the IMF and WBG), this week, Treasury Secretary Bessent attempted to reconcile participation with skepticism. His speech this past Wednesday did offer some reassurances about continued U.S. participation in the Bretton Woods institutions. However, and rightly so, the Secretary criticized what he saw as mission creep, which has taken both institutions away from their original mandates. Yet, in his criticism of these non-core issues, and even acknowledging the validity of some of his points, calls to remove climate from their remit ignore today’s macroeconomic realities. There is no doubt as to the macroeconomic relevance of climate change, and recommending that the IMF stop taking it into account simply does not work. Macroeconomic stability depends on systemic resilience, and climate risk is now a clear systemic threat. Just look at 2025: record coral bleaching, catastrophic wildfires in California, simultaneous floods and fires in South America, and increasingly violent supercell storms in Europe. All of these events impact trade and the generation of wealth, underscoring the urgent need for comprehensive climate action and adaptation strategies to mitigate future risks and help ensure inclusive growth.
As Pierre-Joseph Proudhon once wrote, “Legislation... merely expresses the will of economic relations.” Even revolutionaries understood that political order stems from economic coordination. A truth no less relevant across borders.
Shared Institutions or Spheres of Influence?
“The economic conditions of interstate federalism would be the only way to prevent the re-emergence of nationalism and economic conflict.” — Friedrich Hayek
These institutions are imperfect precisely because they belong to everyone. That is their greatest weakness, and their greatest strength. The multilateralism they stand for is the ultimate bulwark against fragmentation. Indeed, more than anything multilateralism is the operating infrastructure of the world we live in. There are no truly isolated nations. Even the most recluse, such as North Korea, rely on a system of alliances and exchanges, as illustrated by their participation in the invasion of Ukraine. And without it, they would have collapsed long ago. Consequently, institutions where the U.S., China, Europe and the Global South still meet to discuss pressing issues are irreplaceable. They may not be building blocks, but they clearly prevent the emergence of stumbling ones.
Efforts to politicize or provincialize the institutions, regardless from which side, are counter to the general interest. It is precisely because of their global reach, and their general immunity from politics, that the institutions work, and are able to provide solutions that impact positively the world’s population. To be clear, I am not suggesting that these institutions bat 1,000, nor that they are mistake-free. The list of past failures, and “whoops” moments is long. Furthermore, there is no doubt that while global poverty has been significantly reduced thanks to the ongoing work of both the IMF and the WBG, many have been left behind. Therefore, calling for both to adapt to a new reality is not just warranted. It is entirely justified. But we must defend the universalist principle and scope that defines both the IMF and WBG. Ultimately, the problem is not that these institutions serve too many. Rather, it is that everyone believes they can do a better job than them. Especially those who have never worked in such environments, and on such issues.
Universality Is the Point
"America will meet these challenges and, in partnership with its allies, will continue to lead the world toward peace, prosperity, and freedom." — Ronald Reagan
In today’s zero-sum world, universality is not nostalgia. It is the reality, and thus a necessity. Reforming the institutions, asking them to better serve their membership, is perfectly acceptable, and indeed necessary. But reform should not morph into erasure.
The opposite of cooperation is not competition. It is collapse. We are fortunate to have inherited a robust framework, built on the ashes of previous civilizations. We should not be too quick to squander it, especially in the hopes of scoring cheap political points. Instead, we should ensure that the necessary reforms adhere to the world’s needs, and that they are born from concertation, not imposition. The ultimate measure of an institution is not its perfection, but whom it still brings to the table.