Political Economy of the Global Financial System in the 21st Century

The world economy in the 21st century faces increased uncertainty and emerging crises. The most significant of these, known as the Great Recession, has led to significant changes in the global financial system since the post-Bretton Woods era. The author aims to trace these changes through the activities of international financial institutions, and to demonstrate the need for a political and economic approach to evaluating their activities, including the strengthening of their social orientation. The aim of the study is to explore the potential for global financial regulation, while also enhancing the humanitarian and economic focus of international financial institutions, and transforming the global financial system in response to the challenges of the 21st century’s crises. The main methods used in this study were system and logical methods, induction and deduction, as well as statistical analysis. These methods helped to reveal trends in the expansion of financial models proposed by the IMF and the World Bank, as well as the main changes in the global bond market and its differences from the equity market. Data from the World Bank and IMF, as well as international statistics and fundamental research databases, were used to conduct a political and economic analysis of the activities of international financial institutions and their impact on individual countries. Particular attention was paid to the least developed countries and their social development. As a result of the study, the conclusions regarding the increase in poverty caused by financial and credit assistance from the IMF to developing countries were refuted. The study also highlighted the role of international financial institutions in supporting poor countries in achieving the UN Sustainable Development Goals. The concept of “socialization of the activities of global financial organizations” was introduced. It has been shown that the focus of financial institutions, in addition to their core functions, on humanitarian issues in the modern world largely determines the financial architecture in which the global economy operates.

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