Global financial regulation in the "New International Economic Order" The unfulfilled promise of equitable economic governance

Purpose In 1974, the UN General Assembly adopted a landmark resolution proclaiming the establishment of a New International Economic Order. One of the basic aims of this declaration was to enhance the voice and participation of developing countries in the international economic decision-making process based on norms of equitable governance. More than four decades have passed since its adoption. This paper aims to reflect on the past 43 years of the global financial regulatory system in light of the notion of equitable governance as envisioned by the "New International Economic Order". Design/methodology/approach This paper surveys the global financial regulatory system from the vantage point of equitable economic governance. This discussion covers the period that comes after the 1974 UN landmark resolutions that declare the establishment of a "New International Economic Order". The authors use qualitative and quantitative approach in this study. They use descriptive statistics and intuitive discussions of certain cases to carry the objective of the paper forward. Findings First, part of the development in global financial regulation manifests the establishment of informal networks that embark on global regulatory issues, while being very exclusive in their membership policies. Second, the lack of full and effective participation of developing countries in the decision-making and norm setting remains unsolved in the global financial regulatory system. Third, the shadow role of the World Bank and International Monetary Fund was of great significance in assisting the implementation of non-binding regulatory rules of international finance in developing countries despite the concerns of legitimacy and equity in the making of international standards. In sum, the global financial regulatory system that emerged in the past four decades is quite different from that aspired by the NIEO. Originality/value The declaration of NIEO coincides with the collapse of the Bretton Wood's fixed exchange rate which in turn leads to the emergence of a new financial system and regulatory development. This period marked the proliferation of informal networks that make policy recommendations or non-binding rules with global implications. As far as the literature review goes far, this paper is the first to survey the post Bretton Wood's period of the global financial regulatory architecture based on the tenets of the "New International Economic Order".