“Taking Seriously the Needs and Wishes of the Debtor Countries”: Mexican Interwar Advocacy for International Development

Beginning in the 1920s, Mexican economists and diplomats began to argue that the way the world economy was structured and governed presented deep problems for what were variously called the small, weak, and debtor nations, and, in response, they began to advocate the creation of international institutions that would correct the imbalances of global capitalism. In the aftermath of the Great Depression, these efforts were redoubled, and in 1933 Mexican representatives to the Inter-American conference at Montevideo argued for the creation of a permanent economic institution that would reorient the global economy in order to foster industrialization and trade in the Americas: an Inter-American Bank. Mexico’s foreign minister argued for “a new legal and philosophic conception of credit” that recognized the reciprocal nature of international lending: as much as debtors needed capital, he argued, the depression had made clear that creditors also needed borrowers willing to put their surplus capital to use. As the United States was forced by Mexican insistence to take up the bank project throughout the following decade, the Treasury Department assigned none other than Harry Dexter White—who would later go on to chair the U.S. delegation at the Bretton Woods Conference—as the principal negotiator on the IAB, which was chartered in 1940, but never ratified by the U.S. Congress. White and his team, however, took with them the lessons learned in those negotiations when they began planning for Bretton Woods, and this paper will argue that Mexico’s social vision for multilateral finance played a central role in embedding the idea of “development” in the Bretton Woods institutions.