International economic organizations and the idea of aid

In 1944, with victory in the Second World War assured, representatives of the allied nations ‘determined to save succeeding generations from the scourge of war’ held two important conferences at small places in the United States, at which the leading international institutions of the postwar world took shape.

At Dumbarton Oaks (Washington, DC) they agreed to set up the central political and diplomatic organizations of the United Nations, its General Assembly and Security Council, which were formally constituted in 1945. To them were added specialist organizations, some carried over from the former League of Nations particularly the International Labour Office (ILO) and World Health Organization (WHO); others newly created including the Food and Agriculture Organization (FAO) and Educational Scientific and Cultural Organization (UNESCO); and yet others added later, notably the UN Development Programme (UNDP).

At Bretton Woods, New Hampshire, the prime aim was to stabilize the world economy and remedy the economic causes of war, which were widely associated with currency crises, slumps, and unemployment, leading to mass unrest and extremist political movements especially the rise of the fascist dictators in Europe in the 1930s. With that aim it was decided to set up an International Monetary Fund (IMF) to which each member state made an agreed contribution, nine-tenths in its national currency, one-tenth in gold, and from which each could borrow in case of need.