This volume, edited by James M. Boughton and K. Sarwar Lateef, contains the proceedings of a conference held in Madrid, Spain, in 1994, by the IMF and the World Bank to commemorate the fiftieth anniversary of the Bretton Woods conference of July 1944 that created the two institutions. The conference provided a forum for reflection and for reassessing the roles of the institutions as they approach the twenty-first century.

© 1995 International Monetary Fund and World Bank

Reprinted June 1995

This book was designed and produced by the IMF Graphics Section.

Front cover photographs: The Mount Washington Hotel, Bretton Woods, New Hampshire, U.S.A., IMF archives: and Palacio Municipal de Congresos, Campo de las Naciones, Madrid, Spain, IMF photo by Denio Zara.

Cataloging-in-Publication Data

Fifty Years after Bretton Woods : the future of the IMF and the World Bank : proceedings of a conference held in Madrid, Spain, September 29–30, 1994 / James M. Boughton and K. Sarwar Lateef, editors. — Washington : International Monetary Fund : World Bank Group, 1995.

ISBN 1-55775-487-X

1. International finance — Congresses. 2. International Monetary Fund — Congresses. 3. World Bank — Congresses. I. Bough-ton, James M. II. Lateef, K. Sarwar.

HG3881.F4 1995

Price: US$21.00

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The Bretton Woods conference of July 1944 was of incalculable importance for the world economy. It demonstrated and gave life to a remarkable spirit of international economic cooperation; produced agreements that made possible the reconstruction of war-torn economies and an unprecedented growth of output and trade in the following decades; and created two institutions, which we now have the honor to lead, that have been central in the effort to achieve those goals. It was thus natural for the International Monetary Fund and the World Bank to join forces to help their membership commemorate the fiftieth anniversary of that important milestone in the evolution of the world economy.

That this anniversary was a time for celebration was clear, but more importantly it was an opportunity for reflection and for reassessing the roles of our institutions as we approach the twenty-first century. The Cold War has ended, and with it have vanished the divisions that long prevented the Fund and the World Bank from becoming truly global in scope and in membership. International markets in goods and financial assets have grown dramatically. Throughout much of the developing world, a “silent revolution” has brought increasing acceptance of the benefits of financially disciplined and outwardly directed economic policies. The operations, though not the essential purposes, of the Fund and the Bank have changed considerably over the past 50 years to respond to these developments, but much more adaptation is and will continue to be required.

We chose the occasion of the 1994 Annual Meetings of the Boards of Governors of the Fund and the World Bank in Madrid, Spain, to hold a conference on the future of the Bretton Woods institutions that would bring together policymakers, academic economists, representatives of nongovernmental development organizations, and many of the journalists who have covered the institutions over the years. For two days before the meetings officially opened, several hundred of these eminent individuals gathered at the conference to speak, to listen, and to discuss. In our view, they succeeded wonderfully in stimulating thinking and in bringing good and practical ideas to the fore. At the end of the conference, while there may not have been agreement on all of the key issues, we believe that, as this volume shows, we were in many ways closer to a consensus than might have been expected.

We would like to take this occasion to thank all of those who came from around the globe to participate in the Madrid conference and who contributed to this book: the keynote speakers, the panelists, the session chairs, and members of our distinguished audience. Our thanks also to the staff who made it all possible. Under the general direction of Leo Van Houtven and Armeane M. Choksi and with the assistance of many others from the Fund and the World Bank, James M. Boughton and K. Sarwar Lateef organized and ran the conference and were the principal editors of this volume. Finally, we offer our heartfelt thanks to the Spanish Government, which not only was our gracious host in Madrid but whose officials also participated so actively in the conference.

Michel Camdessus

Managing Director

International Monetary Fund

Lewis T. Preston


World Bank Group


This volume is the record of a conference held at the splendid setting of the Palacio Municipal de Congresos, Campo de las Naciones, Madrid, Spain, on September 29–30, 1994. The conference was sponsored jointly by the International Monetary Fund and the World Bank, and it was held in conjunction with the Annual Meetings of the Boards of Governors of the two institutions. All delegates, special guests, staff, and visitors attending the meetings were invited to attend the conference and to participate in the general discussion; that several hundred did attend made the conference a great success. The speakers were chosen from among the policymakers, academic economists, and other influential leaders from all regions of the world who have been actively involved in the key issues facing the Bretton Woods institutions.

The papers and statements included in this volume are based on the presentations made at the conference; each chapter corresponds—in chronological order—to a conference session. In addition, Chapter 1 includes an overview of the discussion on major issues; in many cases, the same issue arose in more than one session, and the overview is intended to help guide the reader to the appropriate chapters that follow.

The contributions took a variety of forms: keynote addresses, formal papers, panel discussions, statements by session chairs, and comments and questions from the audience. Where no written statement was submitted, the text has been derived from the verbatim transcript. When presentations were not made in English, the text was derived either from versions submitted by the authors or from translations made by the conference secretariat.1 Regardless of their source, all statements have been edited with the aim of assembling a comprehensive permanent record, and several authors revised their statements after the conference to clarify specific points.

The views expressed in this volume are those of the individual authors and participants, subject to any misinterpretation that might have crept in through the editorial process, for which we alone are responsible. The opinions expressed are not necessarily those of the International Monetary Fund, the World Bank, or any institution with which an individual author is affiliated.

Both the conference and this volume were the product of many people in addition to the authors. We extend a special note of thanks to Armeane M. Choksi and Leo Van Houtven for their guidance in directing this project; to Angel Torres, our liaison with the Spanish authorities, and to Joaquin de la Herrán and Isabel Riano of the Spanish Ministry of Economy and Finance; to Chris Clarke for his tireless and invaluable service at every stage, including as rapporteur for the conference discussion; to Sonia Benavides, Mary Helen O’Brien, and Kristen Schubert for their work on the conference and on this volume; to Paul Rabé and Marta Vindiola for greatly valued and varied assistance; to the members of the Fund-Bank working group that was responsible for the initial planning of the conference, notably including (in addition to ourselves) Morris Goldstein and Ian McDonald, from the Fund, and to Jochen Kraske, Timothy Cullen, and Michael Walton, from the Bank; to Erik Friis, Patricia Davies, Enrique Alejo González, and the rest of the Annual Meetings secretariat and the Madrid ‘94 Task Force for their assistance in the smooth running of the conference; and, finally, to Elin Knotter for her skillful job of style editing the manuscript and to Tom Walter for seeing the book through to publication.

James M. Boughton

K. Sarwar Lateef


The statements of Felipe González and Pedro Solbes Mira were translated from Spanish by the secretariat. English translations of Liu Zhongli’s statement (delivered in Chinese) and that of Pedro Aspe Armella (delivered in Spanish) were provided by the ministers’ offices. All other presentations were made in English.


  • Foreword

  • Preface

  • Conference Participants

  • 1 Introduction and Overview

    • James M. Boughton and K. Sarwar Lateef

    • The Issues

      • Strengthening Surveillance and the International Monetary System

      • Economic Reform and Conditionality

      • Management of the Transition to a Market Economy

      • Sustainable Poverty Reduction

      • Finance for Development

      • Governance of the Institutions

    • Conclusions: The Global Roles of the Bretton Woods Institutions

  • 2 Global Perspectives on the Issues

    • M. Saifur Rahman

    • Michel Camdessus

    • Lewis T. Preston

    • Felipe González

  • 3 The IMF and The World Bank in an Evolving World

      • Manmohan Singh

      • C. Fred Bergsten

      • Lamberto Dini

    • General Discussion

  • 4 Establishing a Vision for Promoting Economic Development

    • Richard N. Gardner

    • A.W. Clausen

  • 5 Agendas for the Bretton Woods Institutions

    • Introduction

      • Abdlatif Y. Al-Hamad

      • Gerald K. Helleiner

      • Peter B. Kenen

      • Moisés Naím

    • General Discussion

  • 6 The Challenge and Experience of Economic Liberalization and Reform

    • Liu Zhongli

    • Richard Fortes

    Chairman’s Remarks

    • Viktor Gerashchenko

    General Discussion

  • 7 Responding to Transformations in the Developing World

    • Wim Duisenberg

    • Pedro Aspe Armella

  • 8 Adjustment and Economic Growth

    • Tony Killick

    • Alassane Ouattara

    General Discussion


    • Alassane Ouattara

  • 9 Sustainable Poverty Reduction

    • Musalia Mudavadi

    • Widjojo Nitisastro

    • Albert Fishlow

    • Fazle Hasan Abed

  • 10 Establishing a Vision for Stabilization and Reform

    • Hans Tietmeyer

    • Jacques de Larosière

    Concluding Remarks

    • Hans Tietmeyer

  • 11 Surveillance and the International Monetary System


    • Maria Schaumeyer

    • Wendy Dobson

    • Toyoo Gyohten

    • Jacob Frenkel

    General Discussion

  • 12 Preparing for the Future


    • Kenneth Clarke

    • Kwesi Botchwey

    • Moeen Qureshi

    • Leszek Balcerowicz

    • Paul Volcker

    General Discussion

  • 13 Closing Statements

    • Jean-Claude Milleron

    • Michel Camdessus

    • Lewis T. Preston

    • Pedro Solbes Mira

The following symbols have been used in this book:

… to indicate that data are not available;

— to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

– between years or months (e.g., 1992–93 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

/ between years (e.g., 1992/93) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

All references are to U.S. dollars unless noted otherwise

Conference Participants

Featured Speakers

Fazle Hasan Abed is founder and Executive Director of the Bangladesh Rural Advancement Committee, established in 1972. Prior to this, he served as Treasurer and Head of Finance of the Pakistan Shell Oil Company, Ltd.

Abdlatif Y. Al-Hamad has been Director General and Chairman of the Board of Directors of the Arab Fund for Economic and Social Development since 1985. He served previously as Minister of Finance and Minister of Planning of Kuwait and as Chairman of the Boards of Governors of the International Monetary Fund and the World Bank. Mr. Al-Hamad is a member of the Banking Advisory Board Group of the International Finance Corporation and the Commission on Global Governance.

Pedro Aspe Armella was appointed Secretary of Finance and Public Credit of Mexico by President Salinas de Gortari in 1988. He served previously as Under Secretary of Planning and Budget.

Leszek Balcerowicz is a professor at the Warsaw School of Economics. He is also Chairman of the Center for Social and Economic Research Scientific Foundation and Chairman of the Advisory Board of the Foundation for Economic Education. Dr. Balcerowicz was Deputy Prime Minister and Minister of Finance of Poland from 1989 to 1991.

C. Fred Bergsten has been Director of the Institute for International Economics since its creation in 1981. He is also the U.S. representative and Chairman of the Eminent Persons Group created in 1992 by the Asia Pacific Economic Cooperation forum, having served previously as Assistant Secretary of the U.S. Treasury for International Affairs.

Kwesi Botchwey has served as Minister of Finance of Ghana since 1982. Dr. Botchwey was previously a lecturer in law at the universities of Zambia, Dar-es-Salaam, and Ghana and has taught foreign investment, international trade, and economic development.

Michel Camdessus has been Managing Director of the International Monetary Fund since 1987. Mr. Camdessus was Director of the French Treasury and Chairman of the Paris Club between 1982 and 1984 and served as Governor of the Bank of France from 1984 until his appointment to the Fund.

Kenneth Clarke was appointed Chancellor of the Exchequer of the United Kingdom in 1993. Mr. Clarke has been a Member of Parliament since 1970 and has served as Secretary of State at the Home Office and Minister of Health.

A.W. Clausen is the retired Chairman and Chief Executive Officer of Bank America Corporation and its subsidiary, Bank of America N.T. & S.A. He serves as an Honorary Director on both boards. Mr. Clausen was President of the World Bank Group from 1981 to 1986.

Jacques de Larosière has been the President of the European Bank for Reconstruction and Development since September 1993. He served as Director of the French Treasury and Chairman of the Paris Club before becoming Managing Director of the International Monetary Fund in 1978. Mr. de Larosière was Governor of the Bank of France from 1987 to 1993.

Lamberto Dini was appointed Minister of the Treasury of Italy in May 1994. He served previously as Director General of the Bank of Italy and Chairman of the Group of Ten Deputies. Mr. Dini was on the staff of the International Monetary Fund from 1959 to 1976 and served as Executive Director for Italy from 1976 to 1980.

Wendy Dobson is Professor of Economics at the University of Toronto. She served as Associate Deputy Minister of Finance in Canada from 1987 to 1989 and has headed Canada’s leading independent policy institute.

Wim Duisenberg has been President of De Nederlandsche Bank since 1982. He was Minister of Finance of the Netherlands between 1973 and 1977 and served previously as Special Advisor to De Nederlandsche Bank. Dr. Duisenberg was on the staff of the International Monetary Fund from 1966 to 1969.

Albert Fishlow is Professor of Economics at the University of California at Berkeley and Coeditor of the Journal of Development Economics. Until 1983, he was Professor of Economics and Director of the Center for International and Area Studies at Yale University. Professor Fishlow was Deputy Assistant Secretary of State for Inter-American Affairs in 1975 and 1976 and has been a member of many U.S. task forces on Latin American affairs.

Jacob A. Frenkel was appointed Governor of the Bank of Israel in 1991, having served as Economic Counsellor and Director of the Research Department of the International Monetary Fund since 1987. He held the David Rockefeller Chair in International Economics at the University of Chicago and was on the faculty of Jerusalem and Tel Aviv universities.

Richard N. Gardner has been the U.S. Ambassador to Spain since 1993. Ambassador Gardner is on leave from the Faculty of Law at Columbia University, where he holds the Chair in Law and International Organization. He was Deputy Assistant Secretary of State for International Organization Affairs under Presidents Kennedy and Johnson.

Victor Gerashchenko was Chairman of the Central Bank of the Russian Federation from 1992 to 1994. After a career with the Moscow Narodny Bank in Beirut, London, and Singapore and the Ost-West Handelsbank in Frankfurt, he served as head of the State Bank of the U.S.S.R. and First Deputy Chairman of the Vneshtorgbank of the U.S.S.R.

Felipe González has been Prime Minister of Spain since 1982. He has been Secretary-General of the Partido Socialista Obrero Espanol since 1979.

Toyoo Gyohten has been Chairman of the Board of Directors of the Bank of Tokyo, Ltd., since 1992. Prior to his current position, he was a visiting professor at Harvard and Princeton universities and the University of St. Gallen in Switzerland. Dr. Gyohten served as Japan’s Vice Minister of Finance for International Affairs from 1986 to 1989.

Gerald K. Helleiner has been Professor of Economics at the University of Toronto since 1965. He is also the Research Coordinator of the Group of Twenty-Four Developing Countries.

Peter Kenen has been Professor of Economics and International Finance at Princeton University since 1971. He has also served as consultant to the Council of Economic Advisers, the U.S. Treasury, the Office of Management and Budget, and the International Monetary Fund.

Tony Killick has been with the Overseas Development Institute in London since 1979, where he has held the position of Director and, most recently, Senior Research Fellow. He is also a Visiting Professor at the University of Surrey and has been a consultant to many international organizations and governments. Professor Killick has also held teaching and research posts at the universities of Ghana and Nairobi and at Harvard University.

Liu Zhongli has held the position of Minister of Finance of the People’s Republic of China since 1992. He previously served as Deputy Secretary-General of the State Council, Vice Minister of Finance, and Deputy Governor of Heilongjiang Province.

Jean-Claude Milleron is Under Secretary-General of the United Nations for the Department of Economic and Social Information and Policy Analysis. Previously, he served in France as Director General of INSEE and Director of Planning and as Chairman of the Monetary Committee of the European Communities.

Musalia Mudavadi was appointed Minister of Finance of Kenya in 1993. He previously served as Minister for Supplies and Marketing and was Director of Tysons, Ltd., until 1989.

Moisés Naím is currently a Senior Associate and the Director of Latin American Programs at the Carnegie Endowment for International Peace. Mr. Naim served previously as an Executive Director of the World Bank Group and as Minister of Industry and Trade of Venezuela.

Alassane Ouattara has been Deputy Managing Director of the International Monetary Fund since July 1994. He served previously as Prime Minister of Côte d’lvoire, Governor of the Central Bank of West African States, and Counsellor and Director of the African Department of the International Monetary Fund.

Richard Portes has been Director of the Centre for Economic Policy Research since 1983. He has also held the position of Secretary-General of the European Economic Association since 1992.

Lewis T. Preston has been President of the World Bank Group since 1991. Mr. Preston was Chairman of the Board and Chief Executive Officer of J.P. Morgan and Co., from 1980 to 1991, having served as a member of the Corporate Office and the Board of Directors since 1976.

Moeen Qureshi is Chairman and Managing Partner of Emerging Markets Corporation. He was Executive Vice President and Chief Operating Officer of the International Finance Corporation from 1977 to 1981 and was Senior Vice President of the World Bank from 1980 to 1991. Mr. Qureshi served as Prime Minister of Pakistan for an interim period in 1993.

M. Saifur Rahman has served as Minister of Finance of Bangladesh since 1991 and as Chairman of the Boards of Governors of the International Monetary Fund and the World Bank for 1993–94. He served as Minister of Finance, Commerce, and Foreign Trade from 1976 to 1982. Mr. Rahman has been a consultant with Price Waterhouse, Asia Pacific; Arthur D. Little, Boston; and KPMG Peat Marwick International.

Luis Angel Rojo has been Governor of the Bank of Spain since 1992, having served as Deputy Governor since 1988. He is Professor of Economic Theory on the Faculty of Economics of the Complutense University of Madrid.

Maria Schaumayer has been Governor of the Austrian National Bank since 1990. Dr. Schaumayer was previously a member of the Board of Management and Executive Director of Finance of ÖMV Aktiengesellschaft and a member of the Board of Management of the Österreichische Kommunalkredit AG, both in Austria.

Manmohan Singh has been Minister of Finance of India since 1991. He was appointed Economic Advisor to the Prime Minister of India in 1990, having served previously as Secretary-General of the South Commission in Geneva, Governor of the Reserve Bank of India, and Secretary of the Ministry of Finance.

Pedro Solbes Mira has been Minister of Economy and Finance of Spain since 1993. Mr. Solbes previously held positions as Minister of Agriculture and Secretary of State for the European Communities.

Hans Tietmeyer has been President of the Deutsche Bundesbank since October 1993, having served as Vice President since 1991. He previously held the position of State Secretary in the German Ministry of Finance.

Paul Volcker is Chairman of James D. Wolfensohn, Inc., and Professor of International Economic Policy at Princeton University. He has been Convener of the Bretton Woods Commission since its creation in 1992. Mr. Volcker served as Chairman of the Board of Governors of the U.S. Federal Reserve System from 1979 to 1987.

Widjojo Nitisastro is Economic Advisor to the Government of Indonesia. He served previously as Chairman of the National Planning Agency and Coordinating Minister of State for Economics, Financial, and Industrial Affairs. Dr. Widjojo was Dean of the School of Economics at the University of Indonesia in Jakarta.

Other Senior Officials


Stanley Fischer

First Deputy Managing Director

P.R. Narvekar

Deputy Managing Director

Leo Van Houtven

Secretary and Counsellor

Manuel Guitián

Associate Director, Monetary and Exchange Affairs Department

K. Burke Dillon

Chief Economist, Resident

Representatives’ Office in Moscow

World Bank

Attila Karaosmanoglu

Managing Director

Sven Sandstrom

Managing Director

Ernest Stern

Managing Director

Michael Bruno

Vice President, Development Economics and Chief Economist

Armeane M. Choksi

Vice President, Human Resources

Development and Operations Policy

Ismail Serageldin

Vice President, Environmentally

Sustainable Development

Ishrat Hussain

Chief Economist, Africa Regional Office

Other Participants in the General Discussion

Nancy Alexander

Director of Issues,

Bread for the World

Peter Bod

President, National Bank of Hungary

Ariel Buira

Deputy Director, Bank of Mexico

Klaus Engelen

International Correspondent,


Jo Marie Griesgraber

Project Director, Center of Concern

Jacques Polak

President, Per Jacobsson Foundation

Layeshi Yaker

Executive Secretary, UN Economic

Commission for Africa

Salvatore Zecchini

Assistant Secretary-General,

Organization for Economic Cooperation and Development

Conference Secretariat


James M. Boughton


Christopher P. Clarke

Recording Officer

Marta E. Vindiola

Editorial Assistant

World Bank

K. Sarwar Lateef

Staff Director, 50th Anniversary

Secretariat, Human Resources

Development and Operations Policy

Paul E. Rabe

50th Anniversary

Secretariat, Human Resources

Development and Operations Policy

Note: The affiliations and titles are those as of the time of the conference.