Multilateral Development Finance in Non‐Western Thought: From Before Bretton Woods to Beyond

Adler, Krasnodar Krai, Russia. Photo by Vladislav Klapin via Unsplash.

Recent initiatives of China and other emerging powers to create new multilateral development lending institutions (MDLIs) are often portrayed as efforts to build upon or reform an idea pioneered by Western officials during the Bretton Woods negotiations. This viewpoint is understandable since the United States and Britain took the lead role at the 1944 Bretton Woods conference that established the world’s first such institution: the International Bank for Reconstruction and Development, which is now the World Bank.

However, new literature has shown that support for MDLIs also had deeper non-Western roots in the pre-Bretton Woods era. Officials from 42 other governments were involved in the Bretton Woods negotiations, including many from low-income regions beyond Western Europe and North America who brought important ideas to the table.

A new journal article by Eric Helleiner addresses the factors that led thinkers outside the West to propose MDLIs in the earlier period and how their ideas might be relevant to current non-Western initiatives to create new MDLIs. The article focuses on the ideas of China’s Sun Yat-sen (1866-1925) and Peru’s Vıctor Raul Haya de la Torre (1895–1979). Although their intellectual journeys were quite distinct and their specific proposals differed, these two thinkers advocated for the creation of MDLIs with similar reasons stemming from their anti-imperialist sentiments. Their ideas find some echoes in current non-Western initiatives.

Helleiner finds that both Sun and Haya were committed to state-led economic development which they saw as important for helping to fend off foreign aggression. They also believed such a strategy needed external financial support, but were wary of past experiences with foreign private lending and investment. In all, Helleiner determines that current non-Western initiatives to create new MDLIs should not be seen as building upon ideas only from the West, as these new initiatives share some similarities with earlier non-Western proposals from the pre-Bretton Woods era.

This study was published as part of a special issue of the journal of Development and Change edited by William N. Kring and Kevin P. Gallagher.

Read the Journal Article