The politics of war and debt relief in Uganda

This article analyses the politics behind Uganda's relations with its multilateral creditors, particularly the International Monetary Fund and the World Bank, in the context of the country's military intervention in the Democratic Republic of the Congo (DRC). Ugandan officials exploit the anxieties of creditors, which want the country to be considered a successful case of debt relief and reform to justify similar policies in other states around the world. In reality, however, multilateral creditors help to sustain patronage politics that is increasingly based on access to plunder in a neighbouring state. Positive economic-growth figures and social indicators mask the underlying vulnerability of Ugandan state institutions, as the country's military officers pursue private interests. As a result, creditors face real dilemmas in deepening their support for the regime of Ugandan President Yoweri Museveni, which is increasingly reliant on its external backers. Creditors are indirectly subsidising a patronage-based political strategy and the war in the DRC. Alternatively, if they decide to abandon Uganda, they may have to accept a dramatic rise in internal instability.     

Poverty Reduction Strategy Papers and the rhetoric of participation

The World Bank and IMF have proposed the Poverty Reduction Strategy Paper (PRSP) framework for all poor countries as a condition of receiving unconditional debt relief under the HIPC Initiative. The PRSPs will also be the key vehicle for the World Bank and IMF and other donors for various assistance packages, including loans. Like its predecessors, the PRSP framework promotes the ideas of ‘participation’ and ‘ownership’. This article argues that ownership of such a grand framework cannot possibly rest with the poor countries or their people if the whole idea is the product of World Bank and IMF think-tanks. It discusses participation in the development of Bangladesh's PRSP and argues that neither participation nor ownership was the target in preparing a national poverty-reduction strategy: they were merely necessary components of a document required for the continuation of debt and lending relationships with the World Bank and IMF.     

The World Bank,neo-liberalism,and power: Discourse analysis and implications for campaigners

This article examines why the World Bank adopted neo-liberal economic policies. It argues that neo-liberal discourse favoured the interests of key Northern actors, and, more surprisingly, that it also allowed many Southern state actors to maintain or extend their political power. This is because World Bank discourse offers little or no political analysis of the state, instead focusing on 'technical' issues of economic adjustment. While there may now be a certain shift in World Bank discourse towards somewhat greater acceptance of a role for the state, there is still a widespread absence of political analysis, which means that dominant power relations will still not be fundamentally acknowledged or challenged.     

The International Monetary Fund and the World Bank. In need of a better performance?

Since the Mexican crisis in 1994, international financial markets are characterised by frequent turbulence. The two most important international organisations in that field, the World Bank and the International Monetary Fund, have been unable to provide sufficient stability. Surprisingly, the World Bank is in deeper trouble than the IMF. The decreasing importance of public capital flows has made the World Bank much less important than it used to be. Globalisation has led to increased private flows to the developing world, primarily in the form of foreign direct investment. In the long run, there will not be an important function for the World Bank any more. The opposite assessment has to be made for the IMF. The more globalisation progresses, the greater the need for an IMF. However, this does not mean that the Fund will survive in its current form. International financial markets have gained in importance, but they still lack many of the features that characterise the national financial sector. If globalisation shall be continued, we need those governance structures, e.g. a lender of last resort, at the international level. Markets need rules and regulations, and today these are often not existent at the international level. The need for an IMF will even rise, but it will have to be a different one.Abbreviations  CCL Contingent Credit Line - IMF International Monetary Fund - LTCM Long-term Capital ManagementSenior Research Associate, German Institute for International and Security Affairs, Berlin, and Associate Fellow, Centre for the Study of Globalisation and Regionalisation, University of Warwick.     

World Heritage and Public Works: Development Co-operation for Poverty Alleviation

On 29 August 2008, UNESCO's World Heritage Committee and the Japan Bank for International Co-operation co-organised a one-day seminar entitled ‘World Heritage and Public Works: Development Co-operation for Poverty Alleviation’, held at the United Nations University in Tokyo. The seminar focused on the role of World Heritage Sites in promoting development and poverty alleviation, balancing public works that sustain community life and preserve World Heritage properties with development co-operation programmes – especially those of international finance organisations – that include culture and development projects.     

Membership no longer has its privileges: The declining informal influence of Board members on IDA lending

This paper examines the ability of Board members of the most important multilateral donor to developing countries, the International Development Association (IDA) of the World Bank, to influence IDA allocations toward their home countries. I show that a system of Bank staff ratings of individual countries' policies, which has become more important in IDA lending over time, has systematically reduced the informal power of Board members. I show that while IDA Board members received more IDA commitments than their counterparts prior to 1989, this influence has disappeared since, as the importance of the policy index has increased. The findings are robust to the inclusion of fixed effects and a variety of relevant controls. In order to further support my argument, I also investigate the influence of Board membership on the Bank's policy index itself. I am unable to establish any positive relationship between Board membership and the index, either during the Cold War or afterwards. The findings not only shed important light on the internal workings of World Bank allocations to poor countries, but also highlight the ways in which institutional designs can affect the balance of informal power in international institutions.     

Judicial reform and international legal technical assistance in Latin America

In Latin America judicial reform is crucial to both economic liberalization and democratization including the advancement of the rule of law and human rights agendas. The World Bank, the Inter‐American Development Bank, the United States Agency for International Development and other donors have responded with international legal technical assistance to a variety of projects, in pursuit of a number of different objectives. But for the most part governance improvements and economic concerns have been uppermost, reflecting the prominent position of the World Bank. The situation has both advantages and disadvantages. The future of judicial reform in the region will depend on the capacity to build a political consensus on the way forward, not just among donors but within the societies themselves.     

From Swagger to Self-Advocacy: India’s Postgraduate “Transition” in the World Bank

The International Development Association (IDA), the World Bank's facility for low-income countries, has granted India an unprecedented exception to its usual “graduation” policy—extending transitional support to its largest borrower, even though it has crossed the normal eligibility cutoff for IDA’s soft loans (based on per capita income). Before 2012, some Indian officials had called for a “graceful graduation,” believing that India did not need concessionary development assistance any longer. But with IDA graduation imminent in 2013 and facing a limit on borrowing from the Bank’s other window for middle-income countries, the International Bank for Reconstruction and Development, India successfully appealed for continued IDA access. This article draws on official interviews and documents to show how India secured post-graduation transitional support from IDA—suggesting that while India’s leaders seek to present their country as a rising power with influence in multilateral institutions, they can also be pragmatic in their status demands and quietly persuasive in their economic diplomacy.     

Making Room at the Negotiating Table: The Growth of Diplomacy between Nation-State Governments and Non-State Economic Entities

The study of diplomacy has traditionally focused on relationships and interactions between the governments of nation-states, empires, principalities, and similar politicies. This state-centric view has been challenged in recent times by scholars who have sought to take into account the proliferation of different types of actors in the international arena. This paper address diplomacy between governments and non-state economic entities, a broad category of bodies extending from multilateral economic institutions such as the World Bank, International Monetary Fund, and GATT/World Trade Organization to consultative and knowledge-generating bodies such as the World Economic Forum and International Chamber of Commerce.     

Principal-agent problems in international organizations

The paper provides a framework for analysing control problems in international organisations and reviews the disparate evidence from a public-choice perspective. Most examples concern the European Union, the International Monetary Fund, the World Bank and the International Labour Organisation. International organisations suffer from principal-agent problems more than other public or private organisations do because the chain of delegation is more extended. As survey evidence demonstrates, the actors in international organisations do not share the preferences of the citizens because they have vested interests, and the citizens believe that they have least influence at the international level. The paper argues that national and international parliaments, the national governments and international supervisory boards or courts cannot solve the principal-agent problem due to severe information cost and weak or distorted incentives. JEL codes H79 · H11     

When do NGOs Matter? Activist Organisations as a Source of Change in the International Debt Regime

Who drives change in international economic regimes? While mainstream International Political Economy scholarship has traditionally focused on the major players within states and markets as the key sources of political and economic change, recent studies have sought to highlight the important role that is also played by a wider range of social actors. A common point of reference here is the activities undertaken by non-governmental organisations (NGOs), with the campaign to put debt relief for heavily indebted poor countries on the global agenda being often cited as the exemplar of a civil society success story. This article explores the mechanisms through which the international sovereign debt regime for the world's poorest and most indebted economies has changed over the last 15 years, with increasing acceptance that large-scale debt relief was appropriate for a select group of countries leading to the establishment of the heavily indebted poor countries (HIPC) Initiative in 1996 and the Enhanced HIPC Initiative in 1999. Through tracing how international NGOs were able to shape the reform agenda with respect to the international sovereign debt regime for low-income countries, the article seeks to enhance our understanding of when, why, and how NGOs can potentially act as an important source of change in international economic regimes.     

Democracy and economy in Africa: The optimists and the pessimists

Democratization has come relatively late to Africa, but it has swept the continent which hitherto had mostly known only a brief period of liberal democracy immediately after independence. The pressure for democratization has come from the international community with the end of the cold war; and has been encouraged by aid conditionality; and from the peoples of Africa who have felt abused and repressed by other forms of rule in the intervening years. The survival of democracy is however far from assured: there are a number of arguments in its favour, but also a series of political problems. In addition democratization comes after a decade of economic hardship that has left Africa as the poorest continent in the world. The International Monetary Fund (IMF) and the World Bank have promoted Structural Adjustment Programmes, (SAPS) but the international economic environment is generally hostile for Africa's development and structural adjustment has had only limited success. Thus in addition to the political problems of democratization, it is taking place in a harsh economic environment which could contribute to the long term undermining of the enterprise.     

The World Bank’s publication record

The World Bank claims to be a ??knowledge bank,?? but do its knowledge products influence development thinking, or is the Bank merely a proselytizer? The World Bank is a prolific publisher; for example, it has published more journal articles in economics than any university except Harvard. But what about their impact on development thinking? Using citation data from Google Scholar it is hard to discern more than a negligible impact for a great many Bank publications. However, a sizeable minority of its journal articles and books have been highly cited. Compared to leading research universities and other international institutions, the Bank??s ranking in terms of widely-used citation-based indices is no lower than for its journal article counts. This suggests that the Bank??s research does much more than proselytize.     

Time for a haircut: political regimes and sovereign debt restructurings

ABSTRACT

Conventional wisdom claims that reputation leads sovereign states to full debt repayment. However, defaults are recurrent, some debtor countries take a lot of time to end them, and some extract costly concessions from investors. This article argues that these differences are largely explained by the political regimes in the borrowing countries. While previous research examines whether democracies make more credible commitments, we analyze how democracies affect bargaining with foreign investors after a default occurs. Democracies, with their institutional checks, electoral uncertainty, greater transparency, and public deliberation, make swift decision-making harder, create incentives to pander and posture, and give leverage to minimize the win set of viable agreements. We test our theory on a comprehensive dataset of debt restructurings with private creditors in the period 1975–2017. The event history analysis indicates that democracies experience longer restructurings and the double-hurdle regression analysis shows that democracies obtain larger creditor losses. Further, there is interesting variation among democracies and autocracies. Our findings suggest that political regimes are crucial to explaining why cooperation fails in international debt markets.     

Benin: country profile

Since 1972, Benin has had an official Marxist-Leninist ideology; however, centralized state control contributed to economic stagnation and a search for capital investment. A special section of the World Bank is advising the Government of Benin on public sector reform and privatization, and an agreement with the International Monetary Fund seems likely. At present, 65% of Benin's labor force is engaged in subsistence agriculture, most of which is collectivized, and the gross national product per capita is US$260. The main cash crops are seed cotton and palm oil kernels used in soap and margarine. While women occupy key trade positions in the south of Benin, they are very oppressed in the north. Benin has a population of 4 million. The infant mortality rate is 115/1000 lives births and life expectancy is 43 years. Only 21% of the population has access to clean water. 40% of men, compared to just 17% of women, are literate.     

Are international organizations like the Bank for International Settlements unable to die?

International Organizations seem to be immortal or at least long-lived. In this paper several factors which may be responsible for this fact are put forward and then analyzed by studying the empirical case of the Bank for International Settlements (BIS), which has now survived for seventy-eight years all threats to its existence. This is the more surprising since it was heavily attacked by the government of the most powerful country of the world, the USA for some years. This country demanded the dissolution of the BIS at the Bretton Woods Conference in 1944 as a precondition for allowing nations to join the planned International Monetary Fund. Before this the Bank was also able to master the crisis resulting from the demise of the gold (exchange) standard and the end of the German reparation payments agreed on in the Dawes and Young Plans, both consequences of the Great Depression. The Bank even survived the events of the Second World War threatening it, and reacted creatively to the crisis posed by the founding of the European Monetary Union. It is shown that all suspected factors favoring the survival of international organizations were present in the case of the BIS.     

Faith and economics in 'development': A bridge across the chasm?

Beliefs about the origin and nature of the universe and the place of humanity within it have seldom been considered of relevance for economic theory and practice. Yet, for the large majority of the world's people, a bedrock of strong ethical principles, based on their religious faith, is an essential prerequisite for long-term economic progress. The World Faiths Development Dialogue is exploring the possibility of bridging the apparent chasm which separates the secular development agencies, such as the World Bank, from the world's religions. What visions have the faith communities to offer? Is there a genuine convergence of interests?     

Post-war aid: patterns and purposes

A recent report by the World Bank reiterates the widely held view that donor agencies commit large amounts of funding in the immediate post-conflict phase, only for this to taper off to more ‘normal’ levels once the crisis is over. The World Bank criticises this phenomenon, referred to as ‘frontloading’, claiming that it damages the prospects of economic growth, which in turn undermines the peace. This article argues that the Bank's analysis is flawed because it does not distinguish between commitments and disbursements, or take sufficient account of other factors influencing aid patterns over time and in different settings. Moreover, the link between official aid and post-war economic performance is of only marginal significance. Any critique of aid policies needs to be based on a detailed analysis of what is delivered rather than what is promised, and of the impact of donors' assistance on the ground.     

‘Knowledge management’: a case study of the World Bank's research department

This article looks at ‘knowledge management’, using a case study of the World Bank's research department, located in the Bank's Development Economics Vice-Presidency (DEC). Despite the Bank's presentation of its research arm as conducting ‘rigorous and objective’ work, the author finds that the Bank's ‘knowledge management’ involves research that has tended to reinforce the dominant neo-liberal globalisation policy agenda. The article examines some of the mechanisms by which the Bank's research department comes to play a central role in what Robert Wade has termed ‘paradigm maintenance’, including incentives in hiring, promotion, and publishing, as well as selective enforcement of rules, discouragement of dissonant views, and manipulation of data. The author's analysis is based both on in-depth interviews with current and former World Bank professionals and on examination of the relevant literature.     

Fostering Economic Growth through a “European” Debt

Economic growth in the EU area is one of the European Union's tasks and the Union's budget should be used to finance actions aimed at development. It is hard to imagine that an increase in budget revenues or a significant reduction in spending in other areas can provide the resources for this purpose. The proposal put forward is to allow for debt financing of investment spending and to downgrade the current constitutional status of the rule regarding a balanced budget. A “European” debt, it is suggested, could strengthen the international role of the euro. If such a reform were not to find consensus within the Union as a whole, it could, alternatively, be adopted in the Eurogroup.