Analyses of post-World War II reconstruction and stabilization have focused on advanced countries, but examination of under-developed areas, as well, will provide us with a more comprehensive view of this historical process.

Western European reconstruction and stability were achieved fairly systematically. Following the end of the war, Western European countries ran short of dollars to import the machines and raw materials that were indispensable for industrial reconstruction. Currency stabilization and foreign exchange liberalization were regarded as necessary steps to increasing foreign trade. Western Europe was rescued from the 1947 liquidity crisis by emergency loans from the IMF, World Bank and Washington Export-Import Bank (EXIM). Then, from 1948-52, the Marshall Aid Plan supplied dollars to Western Europe. Once they had achieved currency stability around 1949, Western Europe's countries pursued exchange-rate liberalization based on support from the IMF and European Payments Union (EPR). They finally achieved stability in the mid-1950s.

In under-developed areas, by contrast, development and stabilization were a fluctuating and disorderly process. In comparison to the developed countries that were at the center of the post-war international economic system (IMF=GATT regime), under-developed areas were marginal. The U.S provided them aid sporadically, on an ad hoc basis. Although Truman expressed enthusiasm for development when he presented his “Point Four Program”, the U.S. hesitated to embark decisively on an aids program. 1956, however, proved a turning point and the U.S. began actively to export an American development model to counter the Soviet model. The World Bank took its part by complementing the U.S. aid.

East Asia was a marginal area in the post-war international economic order, but it was at the vanguard of the cold war. Following World War II, “the yen exchange area” was divided into three regions: the communist (China), the under-developed (Korea and Taiwan), and the developed (Japan). In other words, the East Asian economy was characterized by segmentation. Trade among these areas was limited. Although the U.S. offered Korea and Taiwan huge sums of economic and military aid, it had no feasible program for East Asian integration.

By the beginning of the 1960s, the U.S. had elaborated an “Economic Growth Model” common to developed and under-developed countries. This model successfully masked the disparities in the post-war international economic system.

This article aims to shed light on the role of the IMF (the Fund) in the establishment of the Bretton Woods monetary system. Previous studies argued that it was the Marshall Plan and the EPU that facilitated Western European reconstruction, monetary stability and exchange liberalization, while regarding the Fund as having failed to resolve the serious dollar shortage in the same period and accordingly lapsing into dormancy.

Contrary to the common view, however, primary sources show that the Fund’s Managing Director and leading staff members sought aggressively to intervene in the process of establishing an intra-European multilateral payment scheme. These efforts persisted even after the Marshall Plan and subsequent “ERP Decision” prohibited the Fund from providing finance to the Europeans. The Fund’s staff regarded the rise of the OEEC and the EPU as potentially undermining to the Fund’s prestige in the field of exchange liberalization.

As early as 1950, therefore, the Fund began considering policies that would prompt its members to remove their exchange restrictions. Attributing the prevalence of exchange restrictions to a worldwide dollar shortage, the Fund’s staff pointed out the need for international policy coordination and stressed the importance of tighter macroeconomic policies aimed at stabilizing international balance of payments. The Fund's emphasis on the need for austerity measures rested on the so-called absorption approach that was being formulated at the time in the Fund’s Research Department. Furthermore, the reform of the financing system undertaken under the leadership of Managing Directors Mr. Gutt and Mr. Rooth enabled the Fund to intervene in the macroeconomic policy-making of its member nations through its financing role.

Consultations on Article XIV began in March 1952, and the Fund began promoting its members’ monetary stability and exchange liberalization in accordance with its liberalization policies. Major Western European currencies returned to convertibility at the end of 1958, and in February 1961, the Fund’s European members transitioned to Article VIII status. It is evident that the Fund was impelled by the bitter experience of “dormancy” to extend its mandate from the relatively minor role of providing short-term finance to the dynamic one of implementing policy on monetary stability and exchange liberalization.

This paper focuses on World Bank loans made to Japanese agriculture after the Second World War, through an analysis of the Aichi Irrigation project that ended in 1961. It asks the following three questions:

1) Why did the Japanese government request World Bank loans for the agricultural sector as part of the Japanese economy's reconstruction process?

2) Why did the World Bank develop and implement these loans?

3) What was the project’s impact on Japanese agriculture?

The paper develops the following conclusions:

1) Because of the foreign currency crisis of 1953, the Japanese government needed to increase domestic food production and reduce food imports. The government moreover conceived of the World Bank loans as a possible trigger for outside investment. Although the international balance of payments improved in the course of the loan negotiations and therefore removed the foreign currency crisis as a factor, the impetus to triggering outside investment remained significant. The project thereby addressed not only the agriculture sector but the industrial sector as well.

2) The World Bank was favorable to agriculture-related loans because it was concerned about the effect of the international balance of payments deficit on Japan’s ability to meet its repayment obligations. The Bank's insistence on securing recovery of the loan, however, protracted the negotiations, with the result that the ultimate economic effects of the project differed from the original aims. Although the World Bank loans accounted for an extremely small portion of the project’s total cost, they did serve to make this particular project a government priority, thereby preventing a delay in its implementation and priming the pump for other loans and investment.

3) As a result of the prolonged negotiations, Japan's agricultural aim had changed by the time of the project's completion, from that of increasing production of major cereals to that of introducing commercial crops, which helped to improve farmers' profitability. The agricultural technology that the World Bank initially tried to introduce --irrigation technology in particular-- therefore did not serve as originally intended. Domestic research institutes, however, did develop technologies suitable to Japan's new agricultural situation and aims.

This paper focuses on the Korea-U.S. Combined Economic Board (CEB), which developed comprehensive policies for the Korean economy after the Korean War, and reconsiders presuppositions about the “development period” by examining economic recovery and stabilization under the American aid program.

Rehabilitation and stabilization in the Korean economy were achieved through cooperation and opposition between Korea and the U.S. The CEB played a central role in this process. Although it is true that significant differences of opinion occurred over the amount and composition of economic aid, the accumulation and use of counterpart funds, and exchange rates, the MSA programs that integrated economic aid and military assistance ultimately caused more friction than did the philosophies of CEB participants. The result was issues over how Korea and the U.S. would share the economic expenses for post-war rehabilitation.

Once the exchange rate was adjusted to meet the increase in prices, a system of cooperation between Korea and the U.S. was formulated, including exchanges in manpower, and management of the Korean economy became highly sophisticated. In particular, the Korean government implemented plans that succeeded in stabilizing the economy, enabling long-term maintenance of the exchange rate. In other words, from the mid-1950s on, Korea and the U.S. were able to avoid excessive friction. The introduction of large volumes of aid supplies enabled Korea to implement an array of projects and thereby to return to its prewar production levels, and long-term economic development plans were drawn up with U.S. support with the aim of enhancing Korea’s capacity for economic independence. The Korean government, however, seeking to stay in power, failed to rein in the sharp increase in prices, and was therefore unable to extend exchange-rate adjustments with the U.S. Ultimately, it faced an economic crisis that resulted in the early demise of its long-term economic development plans.

The above shows that, contrary to the premise of “collapse” and “delay” presented in existing research, the Korean economy of the 1950s did achieve rehabilitation after the war, as well as economic stabilization, and was able to lay the groundwork for the “development period.” Fluctuations in economic aid are not enough to explain the process. That is, the rehabilitation and stabilization of the Korean economy would be impossible without the accumulation of experience and the resulting maturity of administrative capacity.

This article examines the process by which the concept of universal allowances for children took shape in Britain between 1939 and 1942, focusing on the campaign initiated by the All-Party Parliamentary Group.

Recent studies of British social policy during World War II emphasize the need to re-examine the ‘Titmuss thesis,’ which stressed the influence of the War. Did the War promote changes in the conceptualisation of children’s allowances? This paper explores the question by examining the All-Party Parliamentary Group’s campaign for the introduction of ‘universal’ children’s allowances.

The campaign had two phases. The first (1939-40) was the preparatory stage for launching a full campaign, and the second (1941-42) saw the campaign ’s implementation.

In the first phase, the campaigners’ disparate ideas about children’s allowances were brought together into a coherent concept. Previous research regarded the campaign’s proposal as a unified plan. This paper, however, shows that the campaigners’ ideas initially varied, and that it was the outbreak of the War and social survey results that led them to recognize the need for a common policy on universal children’s allowances.

The second phase saw opponents sidelined, which enabled an agreement on the issue to be forged. Much importance has been attributed to the role played by the Labour Party in the Trades Union Congress’s conversion to recognizing the need for universal allowances. This paper, however, shows that not only Labour Party, but also the All-Party group’s campaign, played a significant role in outdebating their opponents, thus paving the way to a new phase of policy-making.

This leads to the conclusion that the start of World War II should be regarded as a turning point in the universal implementation of children’s allowances.