These Bretton Woods institutions (so named because they were set up in the aftermath of the 1944 Bretton Woods conference that reshaped the world economy after World War II) were, by the early 1980s, having a tough time of it. The IMF, in particular, had lost its original role and was struggling to find a new mission. The IMF was originally designed to provide offsetting finance to states facing exchange-rate shocks under the fixed-exchange-rate system that governed the world's money from the 1940s until the 1970s—the Bretton Woods system that pegged the dollar to gold and everyone else's currency to the dollar. Once the United States shut down gold convertibility in 1971, Bretton Woods fell apart, and the world's major currencies began to float against each other. The IMF, literally, had nothing to do.

Mark Blyth, Austerity, loc. 437