Albert Hirschman Centre on Democracy
10 March 2023

Is the financial system undemocratic?

The international financial institutions and the banking sector are the focus of two interviews conducted by AHCD Ambizione Fellow Edoardo Altamura.

“I don’t think the international financial institutions are democratic at all. They are a product of the end of the Second World War […] a reflection of the international order of 1945 with only a handful of countries intervening in the design of the Bretton Woods institutions”. This was the answer of Cuban ambassador to the United Nations in New York, Pedro Luis Pedroso Cuesta, to Ambizione Research Fellow at the Albert Hirschman Centre on Democracy and the Department of International History and Politics Edoardo Altamura’s question of whether the Bretton Woods institutions are democratic.

In the video interview – the first of two conducted during the international conference on finance and democracy organized by Edoardo Altamura on 16 and 17 February – Pedroso Cuesta also noted that their decision-making mechanisms “are not democratic at all.” “It is not ‘one country one vote’,” he noted, but the “economic worth” of the country that mattered.

In a second interview, Professor Youssef Cassis from the European University Institute described the ways in which politics and finance have co-existed since the XIXth century. “In the late XIXth century, [finance] starts looking similar to what we have now [though] the main difference is who the bankers were”. The financial world, he continued, consisted of a small, unstructured number of private bankers, often from the landed aristocracy. “Today, banking is much larger, there are joint-stock companies […] issues are more complex, the products are more complicated.” Despite these differences, the “essence of the relationship” similarly consisted of bankers defending their interests and being consulted over “big issues”.

Interview with the Cuban ambassador to the United Nations in New York, Pedro Luis Pedroso Cuesta
Interview with Youssef Cassis, Professor at the European University Institute