The Role of Developing Countries in the International Monetary System

The present international monetary regime has been characterized as a ‘non-system’, an assessment containing an important element of truth from both the economic and juridical standpoints. Indeed, the (more or less) freely floating exchange rate regime which has prevailed in fact since the upheavals of 1971–73 and in law since 1978 is not so much a system as a collective admission that no system is really feasible in the context of the present world economy. A close look at the present order, however, reveals a very interesting phenomenon the importance of which, unfortunately, is sometimes obscured because it is not reflected in any formal legal structure: this is the de facto division of the world into a two-tier order consisting of industrialized states on the one hand, which generally maintain flexible exchange rates, and developing countries on the other hand, which typically have chosen to fix their exchange rates (either against one of the major currencies, or else against a basket of currencies).