Globalization and the International System: What's Wrong and What Can Be Done.

• Author: Godet, Adam
• Position: Book Review

Globalization and the International System: What's Wrong and What Can Be Done By Peter Isard. New York: Cambridge University Press, 2005. Pp. 326. $26.99.

The current era has both increased the role and importance of international organizations and fueled the debate on their actions and missions. Perhaps the event that most clearly signaled the arrival of this age of globalization was the East Asia currency crisis and the subsequent fallout experienced by other countries. This event demonstrated the potential dangers of liberalized capital in countries with weak institutions; it also illustrated the importance of international monitoring of capital flows. However, it also raised issues that have left many concerned and confused about the international financial system. In his new book, Peter Isard seeks to assuage this concern and clear much of the confusion felt by many.

Isard states that he has three aims to achieve in his book: provide perspectives on the various problems that contribute to financial crises and growth failures, describe remedies as proposed by economists, and shed light on the International Monetary Fund (IMF) and its effectiveness. He does this effectively and, in the process, provides a useful tool for beginning and intermediate students of international finance.

The book is divided into three parts. Part 1 provides the background of the international monetary system. This includes both a brief history of exchange rate regimes as well as a primer on the IMF. Part 2 focuses on financial crises and barriers to economic growth. Specifically, it focuses on the IMF's role in combating both and provides an assessment of the institution's efforts. Part 3 provides policy suggestions for reform.

Isard begins his work with a brief history of the international monetary system. This concise history begins with 1870 and covers the most recent changes--including the European monetary union and the introduction of the euro. While the reader could find more comprehensive histories of the international monetary system, Isard's is unique in two distinct ways. First, he frames his discussion of the system in terms of cooperation. When levels of cooperation between countries has been high (e.g., during the post-World War II era), the system has been more successful than during periods of non- or low cooperation. Isard focuses the latter part of this chapter on how globalization has affected the international monetary system. He takes note...