Paradigm shifts in major global institutions

A good decade after the escalation of the major financial crisis, the question arises: Have key institutions learned the lessons of the crisis? And is there already something of a paradigm shift? In a study commissioned by the New Paradigm Initiative, Laurie Laybourn-Langton and Michael Jacobs systematically tried to find out to what extent institutions such as the International Monetary Fund, important central banks or finance ministries have abandoned their former, often strongly market-liberal orthodox positions. The two British economists conducted systematic interviews with representatives of the organizations concerned and evaluated typical positions over time.

The bottom line is that almost all institutions have already moved significantly away from their earlier positions – the OECD, for example, from its earlier focus on liberalizing and deregulating labor markets to a much more inclusive understanding of economic growth; or the IMF from the dogma of free movement of capital to a much more nuanced recommendation. In most cases so far, however, Laybourn and Jacobs note, it has been more of a moderate departure than a more radical paradigm shift.