What if the IMF was created after World War I?

[Strategos' Risk]

Maybe we'd have Newfoundland around, at least:

If the IMF had existed in 1933, it would have granted emergency debt relief to Newfoundland. The country would have never given up democracy or independence. Indeed, democracy is now a pre-condition for IMF aid.

But as no institution such as the IMF existed in 1933, Newfoundland was compelled to choose between democracy and default.

The story of Newfoundland during the 1930s continues to be a unique tale of how the British Empire coped with a debt crisis in a small country.

But it is also a reminder of why in the aftermath of World War II the nations of the world created the International Monetary Fund. They did not want nations to ever again confront a choice between debt and democracy.

Newfoundland and the Global Debt Crisis - The Globalist

What was the experience of Newfoundland in 1933 when it suffered a debt crisis?

www.theglobalist.com

Was there any will economically, diplomatically, ideologically, after the Great War to create something like the Bretton Woods system, GATT, the IMF, etc.? Maybe a less painful and acrimonious end to that conflict?

 

[GeographyDude]

The IMF seems to be sloppy and careless at the beginning, such as loans for government buildings.

And then they insist on austerity plans.

 

[Strategos' Risk]

Yeah, but maybe they didn't get their taste of austerity until closer to the end of the 20th century.

 

[xsampa]

Maybe we'd have Newfoundland around, at least:

Newfoundland and the Global Debt Crisis - The Globalist

What was the experience of Newfoundland in 1933 when it suffered a debt crisis?

www.theglobalist.com

Was there any will economically, diplomatically, ideologically, after the Great War to create something like the Bretton Woods system, GATT, the IMF, etc.? Maybe a less painful and acrimonious end to that conflict?

Indeed, democracy is now a pre-condition for IMF aid.

Source?

 

[El Pip]

Yeah, but maybe they didn't get their taste of austerity until closer to the end of the 20th century.

The IMF has always asked for some sort of 'fiscal adjustment' when doing an intervention, certainly in the 70s and 80s ones it was there. Because that is the reason most country's call in the IMF, they have ran out of money. Usually foreign exchange, sometimes because they are unable to borrow any more and occasionally because they literally cannot print large notes fast enough. Some balance of tax rise and/or spending cut was asked for, or at least showing those changes had already been made and would come into effect soon.

That said you are correct that the decision to adopt a one-size-fits-all 'Washington Consensus' approach in the late 90s was a disaster. Well disastrous for some countries, it did work well for others, it wasn't a bad plan just one that didn't work everywhere. Sadly the success were used to justify continuing the approach and the failures blamed on the country with the problem.

Maybe we'd have Newfoundland around, at least:

As with so many places the IMF gets called to, the real problem in Newfoundland was politics not economic (to the extent that the politics had caused/made worse the economic problem). The article in question is dodgy at best, the Newfoundland government asked London to suspend self government in 1932 and the Royal Commission was not even launched till 1933 and the British government provided assistance before the Commission had even been launched.

What it does get right is that the Newfoundland government was dodgy as sin at the times, a mob of 10,000 people attacking parliament is bad at any times. But the entire Newfoundland population was less than ~250,000. Getting 5% of the entire population of your country to riot is a sign of deep seated problems.

On the actual question, could an IMF type organisation come in and hand out some massive loans and averted all that? Probably not, because it was the democratically elected government that wanted to end self-rule. There was a general election in 1932 (after the riots forced the previous government to resign and call fresh elections). The UNP's manifesto explicitly said they wanted to suspend self-rule and have British commissioner run the country. They subsequently won 24 out of the 27 seats, so I feel secure in saying this plan had popular support.

 

[Strategos' Risk]

Probably not, because it was the democratically elected government that wanted to end self-rule. There was a general election in 1932 (after the riots forced the previous government to resign and call fresh elections). The UNP's manifesto explicitly said they wanted to suspend self-rule and have British commissioner run the country. They subsequently won 24 out of the 27 seats, so I feel secure in saying this plan had popular support.

Now on a tangent I'm imagining scenarios where decolonizing states opted to place themselves under indefinite trusteeship of the U.N. - or even more crazy, the IMF itself!

 

[Strategos' Risk]

Aside from the idea in the OP, could such a global interlocking system even work before the end of colonial empires and the advent of liberal markets caused by the end of WWII and Bretton Woods? Like the League of Nations did have a ton of responsibilities, including the economic, even if that body lacked the United States. But I bet a lot of the economic theories about global trade and finance didn't even exist yet.

The UNP's manifesto explicitly said they wanted to suspend self-rule and have British commissioner run the country. They subsequently won 24 out of the 27 seats, so I feel secure in saying this plan had popular support.

Now I'm imagining what if an early IMF was created post-WWI, and Newfoundland had asked one of their managing directors or whatever to run them instead.

 

[El Pip]

Aside from the idea in the OP, could such a global interlocking system even work before the end of colonial empires and the advent of liberal markets caused by the end of WWII and Bretton Woods?

Arguably there was such a massive globally interlocking system pre-WW1, Keynes complained about how it had disappeared after the war. It wasn't especially formalised but Keynes words could apply to most of the major powers, there was fairly free movement of people, goods and capital if you were rich enough

Like the League of Nations did have a ton of responsibilities, including the economic, even if that body lacked the United States. But I bet a lot of the economic theories about global trade and finance didn't even exist yet.

The LoN economic organisations tended to be the high priests of the Gold Standard and most of the world was on some sort of precious metal standard post-WW1 so it wouldn't make that much practical difference.

Now I'm imagining what if an early IMF was created post-WWI, and Newfoundland had asked one of their managing directors or whatever to run them instead.

I can absolutely see the incumbent government trying to do that, in order to save their skins and not be booted out of power at an election. I can also see that the population of Newfoundland would actually riot to stop it happening , not that it would be required as I cannot see any early-IMF being foolish enough to risk annoying London over the idea.

 

[ArtosStark]

If you have the 1922 Genoa Conferance terms be accepted by the US (which is a big ask) then there will be international economic bodies with considerably more influence internationally and with a goal of helping Europe rebuild. Some of these organizations, like the League of Nations Bank, existed in OTL but had very little teeth. If the Genoa Conference was successful it’s possible something like the IMF would have come about in the Interwar. Many of the ideas that led to the IMF were around much earlier