LIEO is an acronym for liberal international economic order, a term used by international relations scholars to describe the global free trade establishment. Critics sometimes refer to LIEO as the Washington Consensus, which implies that this system works mostly in the favor of the United States at the expense of smaller countries.

LIEO consists primarily of the organizations in the Bretton Woods system, each of which plays a role in enforcing and expanding LIEO. The World Trade Organization, for example, creates and implements free trade agreements, while the World Bank issues structural adjustment loans to Third World governments that include conditions ranging from opening up their markets to Western businesses to privatizing public utilities.

Among the firmest underlying assumptions of liberal free market ideology is that as regulations are removed, global trade becomes more efficient and peoples' needs are better met, allegedly resulting in less poverty, and consequently, stability and peace.

Critics point to rampant abuses of laborers and citizens in the Third World by multinational corporations, as well as the negative effects on public health caused by privitizing public utilities. Third World countries are particularly incensed by the continuing existence of tariffs on United States agricultural products, which they claim run counter to the spirit of free trade and prevent them from taking full advantage of the global marketplace.

Internal Links

• Bretton Woods Agreement

External Links

• Structure of the Bretton Woods System
• The Case of Texaco in Ecuador -- an example of what can happen when multinational corporations visit countries with governments unwilling (or unable) to regulate them.