Economic Multilateralism in Peril
| Author | Manmohan Agarwal |
| Published date | 01 October 2021 |
| Date | 01 October 2021 |
| DOI | http://doi.org/10.1177/00208817211056741 |
| Subject Matter | Research Articles |
https://doi.org/10.1177/00208817211056741
International Studies
58(4) 425 –441, 2022
© 2021 Jawaharlal Nehru University
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DOI: 10.1177/00208817211056741
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Research Article
Economic Multilateralism
in Peril
Manmohan Agarwal1
Abstract
The Doha Round of multilateral negotiations is at a stalemate. The aid situation is
changing as many countries are graduating from the soft loan arm of the World
Bank Group. Developing countries built up their foreign exchange reserves to
avoid borrowing from the International Monetary Fund (IMF), leading the IMF to
retrench. This article explores the evolution of multilateralism from, essentially,
its political roots to the economic area after the First World War (FWW),
though in a limited way, and more fully after the Second World War (SWW).
We then discuss how the workings of these economic multilateral institutions
resulted in the current situation, where they risk becoming irrelevant. Finally, the
article discusses the possible role of theG20 in the revival of multilateralism and,
in particular, the role that developing countries might play in the revival.
Keywords:
Economics and development studies, economic relations, diplomacy, geopolitics,
hegemony, international politics
Introduction
The Doha Round of multilateral negotiations is at a stalemate. The aid situation is
changing as many countries are graduating from the soft loan arm of the World
This is a revised version of a presentation made at a Symposium on Multilateralism and Developing
Countries (Tribute to Shailaja S. Thakur) at Sri Venkateswara College, New Delhi. I would like to
thank the participants of the symposium for their comments and questions. I would also like to thank
Prof Berlage and Prof Elizabeh Sidiropoulos for their helpful comments. A more detailed version is
available as a research and information systems working article.
1 Research and Information Systems for Developing Countries, New Delhi, Delhi, India
Corresponding author:
Manmohan Agarwal, Research and Information Systems for Developing Countries, New Delhi,
Delhi 110003, India.
E-mail: manmohan44@gmail.com
426 International Studies 58(4)
Bank Group. Developing countries built up their foreign exchange reserves to
avoid borrowing from the International Monetary Fund (IMF), leading the IMF to
retrench. It is an open question whether the 2008 crisis will revive the Fund or if
it will sink back into irrelevance. This article explores the evolution of
multilateralism from, essentially, its political roots to the economic area after the
First World War (FWW), though in a limited way, and more fully after the Second
World War (SWW). We then discuss how the workings of these economic
multilateral institutions resulted in the current situation, where they risk becoming
irrelevant. Finally, the article discusses the possible role of the G20 in the revival
of multilateralism and, in particular, the role that developing countries might play
in the revival.
Multilateralism is defined by experts in terms of adherence to international
norms and the existence of international institutions, rather than quantitatively, as
a gathering of three or more parties (Ruggie, 1993).
Political Origins of Multilateralism
Peace conferences were held periodically at the conclusion of European wars
since the mid seventeenth century to provide the public good of peace necessary
for the preservation of life and prosperity. It seems to be a European phenomenon
where wars were fought between two large coalitions.
The Westphalian European peace conference of 1648, the first such conference,
ended religious wars by recognizing that rulers and their subjects may follow
different religions (Barro & McClearey, 2005).1 It also recognized the notion of
national sovereignty, including inviolability of national borders and non-
interference in the internal affairs of another country (Kissinger, 2014). The peace
treaties signed at Utrecht between 1713 and 1715 ended the War of Spanish
Succession2 and developed the notion of the balance of power, with no state large
enough to threaten its neighbours (Lesaffer, 2014). The Congress of Vienna, held
in 1814–1815 after the Napoleonic wars, sought to end ideological wars and the
threat to monarchies (Kissinger, 1957). Other conferences established spheres of
influence. The Berlin Congress of 1878 determined the territories of states in the
Balkan Peninsula after the Russo-Turkish War of 1877–1878 (Taylor, 1954, pp.
228–254), the Berlin Congress of 1884–1885 divided Africa among the major
European powers (Forster et al., 1988), and the Algeciras conference of 1906
determined the influence of European powers in North Africa.3
The Paris Conference after the FWW carried the scope of international
agreements beyond the political arrangements arising from the break-up of the
Austro-Hungarian and Ottoman empires. It sought reconstruction of war-affected
economies and the recovery of the world economy; reparations significantly
influenced these. Economic recovery depended on correction of the massive
balance of payments imbalances resulting from the financing of the war so that
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