Liberal international economic order

In international relations, the liberal international economic order (LIEO), also known as the rules-based order or the US-led liberal international order, is a notion that contemporary international relations are organized around several guiding principles, such as open markets, multilateral institutions, liberal democracy, and leadership by the United States and its allies. The order was established in the aftermath of World War II, and is often associated with Pax Americana.

International organizations play a central role in the liberal order. The World Trade Organization, for example, creates and implements free trade agreements, while the World Bank provides aid to developing countries. The order is also premised on the notion that liberal trade and free markets will contribute to global prosperity and peace. Critics argue that the liberal order has sometimes led to social problems such as inequality and environmental degradation.[1]

Critics also argue that the liberal order tilts the scales in favor of the United States and its Western allies, as seen in voting shares in the International Monetary Fund and World Bank. Some see China as a potential challenger to the liberal order, as its initiatives such as the Asian Infrastructure Investment Bank and One Belt One Road Initiative appear to compete with existing international institutions.

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