In a world where the word "globalization" has become hackneyed due to overuse, there will inevitably be some backlash against the international institutions are gaining importance vis-a-vis national and local institutions. Just as in many nations with a federalist system, a locality will rail against what it perceives to be "federalist interference" in local concerns, the simple wish to be self-governing causes groups, even nations, to fight the globalization that seems to be a foregone conclusion.
This basic desire for self-rule is what has led so many nations to seek democracy in the first place. But even if they have succeeded in establishing a democracy, and even if they have found a satisfactory internal balance of democracy and bureaucracy, they face a new challenge. How can they balance their national democracy with the pressures of gigantic international bureaucracies?
Two such influential bureaucracies are the International Monetary Fund and the United Nations. In the 1990s, both institutions have been quite active in East Asia, and the conflict between them and local democracies has raised some interesting questions about the new attempt to balance local concerns with 21st century tendencies toward globalization.
The International Monetary Fund
Lately, the IMF has been in the news quite a bit for its attempts to rescue Asian nations in an economic crisis. Michel Camdessus, the Managing Director of the International Monetary Fund, said at the Annual Meeting of the Bretton Woods Committee on February 13, 1998, that the IMF has several policy concerns beyond merely loaning money to nations in need. The IMF also wants to further deregulation, develop effective regulation and supervision of financial systems, cut inefficiencies in government (including "costly military buildups"), and increase spending on health care, education, and "social protection for the poor." In order to push these reforms, IMF involvement often includes stringent measures for fiscal reconstruction attached as conditions to its loans.
The application of these conditions in Asia has sparked a backlash against the 182-member international organization. Harvard professor Jeffrey Sachs argued in a November 3, 1997 article in the New York Times that if the IMF loans are "tied to orthodox financial conditions, including budget cuts and sharply higher interest rates, the package could do more harm than good, transforming a currency crisis into a rip-roaring economic downturn." Martin Feldstein, another professor at Harvard (and President of the National Bureau of Economic Research) argued in the March/April 1998 Foreign Affairs that "the IMF should eschew the temptation to use currency crises as an opportunity to force fundamental structural and institutional reforms on countries, however useful they may be in the long term, unless they are absolutely necessary to revive access to international funds."
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