The Making of Neoliberal Globalization: Norm Substitution and the Politics of Clandestine Institutional Change

Abstract

Since the 1980s, neoliberal policies have been diffused around the world by international institutions established to support a very different world order. This article examines the repurposing of the International Monetary Fund (IMF) to become the world’s leading promoter of free markets. Social scientists commonly point to two modes of global-level institutional change: formal and fundamental transformations, like renegotiated treaties, or informal and incremental changes of a modest nature. The case of the IMF fits neither of these molds: it underwent a major transformation but without change in its formal foundations. Relying on archival material and interviews, the authors show that fundamental-yet-informal change was effected through a process of norm substitution—the alteration of everyday assumptions about the appropriateness of a set of activities. This transformation was led by the United States and rested on three pillars: mobilization of resources and allies, normalization of new practices, and symbolic work to stabilize the new modus operandi. This account denaturalizes neoliberal globalization and illuminates the clandestine politics behind its rise.