International Monetary Reform: A Review Article
A recently published book by Stephen Cohen, International Monetary Reform, 1964-69, examines the six-year negotiating process to reform the international monetary system,1 a process which resulted in the institution of the special drawing rights (SDR) facility-a new international reserve asset. The volume consists of an introduction, six chapters, an appendix containing the text of the SDR agreement, and a bibliography. Chapter 1 outlines the economic and political background to international monetary reform, chapters 25 describe the actual negotiations which culminated in the SDR agreement, and chapter 6 examines the political implications of this reform. The thesis of the author is "that the monetary reform exercise was an aspect of Atlantic-community politics and reflected a resurgent Western Europe demanding a shift in the international monetary balance of power to its favor."2 He argues that the economic (also called technical) aspects of the reform were insignificant compared to its political nature. Indeed, Cohen seems to take delight in emphasizing the unimportance of traditional economic factors in the SDR negotiations, often implying that economics (especially in the form of econometrics) is not relevant in analyzing the international monetary system in general, and the reform process in particular. He writes: "Maneuvering [in the monetary negotiations] along clearly recognizable political lines, not on the basis of econometric models, became prevalent";3 "econometric models depicting the technical excellence of one plan over the other were not the basis