## Christine Lagarde on the Future of Bretton Woods

## Source details

**Canonical URL:** [Christine Lagarde on the Future of Bretton Woods](https://www.imf.org/en/publications/fandd/issues/2019/06/christine-lagarde-future-of-bretton-woods-straight)

## Other formats

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- [Structured JSON version](/en/publications/fandd/issues/2019/06/christine-lagarde-future-of-bretton-woods-straight/index.json)
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## Bibliographic details
- Authors: CHRISTINE LAGARDE
- Published: June 1, 2019

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### Overview
- Letter addressed to the next generation reflecting on the 75-year history of Bretton Woods and calling for renewed global economic cooperation.
- Context: delegates from more than 40 countries met at Bretton Woods to design a postwar order aimed at avoiding the protectionist mistakes that worsened the Great Depression.
- Bretton Woods established the International Monetary Fund with three missions: promoting international monetary cooperation, supporting the expansion of trade and economic growth, and discouraging policies that would harm prosperity.

### Historical achievements highlighted
- Over its 75-year history, the IMF has adapted while serving its 189 members with “wallet, brain, and heart”: policy advice, technical assistance and training, and financial support.
- Concrete outcomes cited:
  - Trade has reduced the cost of living for a typical family in low-income countries by two-thirds, and in advanced economies, by a quarter.
  - Globally, more than 1 billion people have climbed out of poverty.
- The Bretton Woods framework helped prevent the return to isolationist policies that contributed to the Great Depression and subsequent conflict.

### Persistent and emerging challenges
- Enduring problems:
  - Far too many still suffer from poverty and lack of opportunity.
  - Young people are among the most disadvantaged.
  - Many low-income countries will struggle to meet their Sustainable Development Goals by 2030.
  - Poverty, rising inequality, and new technologies have sparked anger and resentment; corruption has eroded trust in institutions.
- Risks:
  - Unilateral, go-it-alone approaches could lead to an “Age of Anger,” repeating historical breakdowns in international cooperation.
- Two priority issues raised by younger generations:
  - Climate change threatens the future of the planet; “if you do not have a plan for the environment, you do not have a plan for the economy.”
  - Corruption: the annual global cost of bribery alone amounts to $1.5 to $2 trillion and has corrosive societal effects.
- Reference to past financial instability: regulators should guard against the kind of financial excess that led to the debilitating global financial crisis 10 years ago.

### Policy agenda and recommendations
- Domestic policy priorities:
  - Fiscal policy must create broader opportunities through access to quality education, health care, and infrastructure—especially for those left behind.
  - Pay special attention to young people and to women.
  - Address excessive inequality via progressive tax measures that are country-specific and through stronger social safety nets to manage dislocations from technological change and globalization.
  - Central banks should guard against inflation as “the worst tax on the poor.”
  - Regulators must prevent financial excesses that can trigger crises.
- International policy priorities (a “new multilateralism”):
  - Reform trade systems to address distortions while preserving the benefits of openness, which historically spread technologies, boosted productivity, and created jobs with higher wages.
  - Reform international corporate taxation to ensure multinational companies pay their fair share and to preserve tax revenues needed for essential investment in people and infrastructure.
  - Strengthen cooperation to tackle climate change and corruption as global collective-action problems.

### Vision and call to action
- Advocacy for building an “Age of Ingenuity” grounded in a renewed commitment to global economic cooperation and shared prosperity.
- Emphasis on collective responsibility: “solidarity was self-interest,” and prosperity should not be “scattered here or there among the fortunate or to enjoy it at the expense of others.”
- Encouragement to the next generation to invent, innovate, and pursue greener and more inclusive policies to achieve greater prosperity for all.

*Christine Lagarde, "Updating Bretton Woods," F&D Magazine, June 2019.*

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_Source: https://www.imf.org/en/publications/fandd/issues/2019/06/christine-lagarde-future-of-bretton-woods-straight_