Global Finance and Free Trade Limits and Possibilities

GLOBAL AND FINANCE TRADE – LIMITS AND POSSIBILITIES
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Global and Finance Trade – Limits and Possibilities
Introduction
International Monetary Fund (IMF) and World Bank (WB) have been essential cogs of the global economy. They play essential roles in assisting various nations across the globe from financial crises while also funding the important projects in developing countries. Despite the perceived significance of their work, these two institutions face major criticisms, which hinge upon their legitimacy and authority. The economic policies they place on countries have proved unsuccessful in multiple cases. Moreover, unequal representation in the process of voting and moreover, making decisions is also a concern for these two international financial institutions (IFI). These two bodies are also great advocates for free trade. Free trade refers to the economic model where multinationals are prohibited to conduct business without quotas, tariffs, or any other constraint. Through free trade, customers are guaranteed higher-quality and cheaper products. The subsequent discussion offers in-depth analysis on legitimacy and authority-related issues surrounding IFI (IMF and WB) as well as the merits and demerits of free trade.
Legitimacy and Authority of the IMF and World Bank
Legitimacy has been a historical and political though but gained greater attention with the advancement of international relations. International organizations (IO) and in this case, the IMF and World Bank act as independent and neutral actors when they come to the global stage. This independence is vital in the creation of transformational relationships among states and even better, enhances the efficiency and legitimacy of their individual or collective decisions. Besides, it enables the IO to initiate a short or long-term balanced actions which are dependent on the profound interest of both parties. This sentiment implies that powerful states are reluctant to conduct any business with organizations they are aware they cannot influence. On the other hand, the less powerful or smaller states will fail to enter into deals where their sovereignty is undermined.[Gabriela, Sterian Maria. "The Role of International Organizations in the Global Economic Governance-An Assessment." Romanian Economic and Business Review (2013): 308-316.]
The two funding institutions have been central in increasing integration among global states. Consequently, the old age challenges of poverty and ways of improving human development are becoming solvable and hope towards their success is higher. Despite the constant setbacks in regards to their governance, the IMF and World Bank have been two crucial institutions in the elimination of global poverty particularly in developing counties. The spotlight that the poorest countries has gained as a consequence of the actions thereof has compelled the institutions into thinking of involving them in various aspects such as higher representation. Representation in this regard comes in terms of voting power because they are the primary borrowers while the industrialized nations do not borrow as much. It is undeniable that these firms have altered the progress of the developing countrie...