UvA-DARE (Digital Academic Repository) Norms, legitimacy, and global financial governance Working Paper Series WEF 0013 Norms, Legitimacy, and Global Financial Governance Norms, Legitimacy, and Global Financial Governance Norms, Legitimacy and Global Fina

Abstract Despite regular and serious systemic volatility, reform of international financial architecture remains limited, retaining market-oriented characteristics and adjustment mechanisms. A failure of the architecture to focus on the political underpinnings of global financial and monetary governance yields crucial deficiencies. The article defends three propositions implying a serious challenge to political legitimacy in contemporary financial governance: i) external financial constraints conflict with a range of potential domestic, particularly democratic, political imperatives; ii) developed state initiated global financial integration strengthens private interests in the policy process, narrowing the definition of the public interest in a democratic context; iii) market-friendly institutional reforms put pressure on domestic socio-political arrangements underpinning longer run political legitimacy. The article first analyses norms and legitimacy in global financial governance; then outlines the constraints on public policy of global financial market integration in the light of the foregoing analysis of legitimacy; thirdly it discusses possible solutions