On the contradictions of the New International Financial Architecture: Another procrustean bed for emerging markets?

The New International Financial Architecture (NIFA) was created by powerful G-7 countries in response to the growing volatility in the developing world. Some key components of the NIFA include: the G-20, the Financial Stability Forum and the Reports on Observance of Standards and Codes, the latter involving areas such as corporate governance. The aim of this article is to address some important yet largely neglected questions. Why the new building? Who benefits from this construction? Unlike most accounts of the NIFA, the following analysis does not remain focused on its institutional terrain; but instead draws linkages between these structures and the paradoxes inherent in global capitalism. One such contradiction is the constant promotion of financial liberalisation in emerging markets by US-led international financial institutions (IFIs), on the one hand, and the frequency of financial crises in the developing world, on the other. The article suggests that the NIFA is an attempt to strengthen (stabilise and legitimate) the scaffolding of the existing imperative of free capital mobility.