budget cuts and high interest rates, both of which further complicated efforts at international economic co-operation, and particularly, that part of it directed at international development. Pressures for short-term solutions at the same time -8- generated inward-oriented trade measures to protect domestic employment, in frequent disregard of international obligations or effects. International disagreements over the appropriate mix of monetary and fiscal policies, exchange rates and short-term macro-economic objectives - in circumstances of unprecedented economic interdependence - did little to maintain or restore the spirit of economic co-operation characteristic of the earlier post-war years. 41. Failure to achieve sufficiently rapid results, disillusion or disagreement over political issues with respect to the developing countries and the domestic retreat from welfare-state approaches all contributed to an erosion of industrial countries' previous support for developing countries' aspirations in the world economy. The "development consensus" of the 1950s and 1960s could no longer so easily be assumed. 42. Governments have responded to the pressures of the past decade in ways they have seen to be politically supportable and economically effective over a relatively short time horizon. The international implications of domestic measures have not in recent years typically carried much domestic political weight. Nor have the possible longer-run detrimental effects of actions that seem to bring short-run pay-offs. Macro-economic policies and sector - or industry - specific measures have been undertaken unilaterally, bilaterally, or among small groups of co-operative countries, regardless of wider multilateral forums or agreements. The larger and more powerful the country, the greater its capacity for effective pursuit of its own objectives in disregard of international feedback effects. 43. The existing multilateral institutions have struggled to adapt to the needs of changing world political and economic realities, but their efforts have sometimes been flawed and, increasingly, not very enthusiastically encouraged by national 
**Analysis**
The text primarily discusses the challenges faced by international economic cooperation and development, highlighting the tensions between short-term economic interests and long-term development goals. It also touches on the erosion of the "development consensus" and the struggles of multilateral institutions to adapt to changing global realities.

**Category**
International trade, Economic development