How soon is now? The effects of the IMF on economic reforms in Latin America

This study assesses the effects of IMF loans on economic liberalization in Latin America. Specifically, we are interested in whether the Fund receives greater cooperation from Latin American borrowers in the initiation of some economic reforms over others. Using a two-stage treatment effects model as well as panel-corrected standard error (PCSE) regression for 15 Latin American countries from 1980 to 2003, we find that IMF participation tends to lead to greater trade and capital reforms and less reform in privatization. These relationships are tempered by the country??s relationship with the United States along with domestic group pressures.     

The Socioeconomic Impacts of Structural Adjustment

The 1980s were painful years of structural adjustment during which many developing countries abandoned statist economic models in favor of market-oriented paradigms. The proponents of structural adjustment, including international lending agencies such as the IMF and World Bank, argued that reforms were necessary to restore growth and curtail inflation. The opponents of adjustment claimed its macroeconomic results were not a foregone conclusion and, regardless of them, such changes would drastically affect the already precarious position of the poor. We use data from sixteen Latin American cases to examine the socioeconomic impacts of structural adjustment. Adjustment was weakly associated with growth, and reform did seem to reduce inflation. Counterintuitively, the extent of structural adjustment appears to be negatively associated with both poverty and inequality. Finally, empirical data show that low levels of growth or even mere economic stability are the best remedy for poverty and inequality.     

Master or Servant? Common Agency and the Political Economy of IMF Lending

What explains the substantial variation in the International Monetary Fund's (IMF) lending policies over time and across cases? Some scholars argue that the IMF is the servant of the United States and other powerful member-states, while others contend that the Fund's professional staff acts independently in pursuit of its own bureaucratic interests. I argue that neither of these perspectives, on its own, fully and accurately explains IMF lending behavior. Rather, I propose a "common agency" theory of IMF policymaking, in which the Fund's largest shareholders—the G5 countries that exercise de facto control over the Executive Board (EB)—act collectively as its political principal. Using this framework, I argue that preference heterogeneity among G5 governments is a key determinant of variation in IMF loan size and conditionality. Under certain conditions, preference heterogeneity leads to either conflict or "logrolling" within the EB among the Fund's largest shareholders, while in others it creates scope for the IMF staff to exploit "agency slack" and increase its autonomy. Statistical analysis of an original data set of 197 nonconcessional IMF loans to 47 countries from 1984 to 2003 yields strong support for this framework and its empirical predictions. In clarifying the politics of IMF lending, the article sheds light on the merits of recent policy proposals to reform the Fund and its decision-making rules. More broadly, it furthers our understanding of delegation, agency, and the dynamics of policymaking within international organizations.     

Richard Nixon and Economic Nationalism in Latin America: The Problem of Expropriations, 1969–1974

During the late 1960s and early 1970s, the Nixon administration confronted the problem of how best to protect US economic interests in Latin America during a period of rising economic nationalism. After extensive debate, the president approved a policy designed to deter expropriations and rein in nationalist economic sentiment by threatening to terminate US and international financial assistance to countries that expropriated American holdings without prompt and adequate compensation. As it turned out, however, this policy was little short of a disaster. Nixon's stance heightened American unpopularity during a period when US credibility in Latin America was already on the wane, and failed to have any restraining effect on either the number of expropriations by Latin American countries or the strength of economic nationalism in the area. Informed by domestic and bureaucratic pressures and the same ideological proclivities that have long characterized American relations with the underdeveloped world, Nixon's policy on the expropriations issue ultimately proved ineffective and even pernicious to US interests in Latin America.     

Who Can Reform the Labor Market? IMF Conditionality,Partisanship, and Labor Unions

Labor market reforms are critical for economic growth. Yet, they are politically contentious, and governments, more often than not, are faced with strong opposition from interest groups. Scholarly work shows that governments often rely on external intervention to implement politically difficult reforms. This is the case with the International Monetary Fund (IMF) that typically conditions its financing on the implementation of required reforms. Do borrowing governments benefit from IMF programs to overcome domestic opposition to reform by organized interests? Utilizing a unique new data set on IMF conditionality, I show that partisan and electoral concerns and domestic alliances strongly affect the implementation of labor market reforms, even when the IMF imposes them. When faced with increasing number of strikes, left-wing governments are more likely to implement labor market reforms than center/right-wing governments. However, the left is less likely than the center/right to fulfill its international commitments during election years when labor groups are militant. These findings highlight the left’s unique ability to form pro-reform coalitions and the IMF’s conditional role in removing domestic political opposition to reform. Counter-intuitively, right-wing governments still struggle to reform the labor market, even during economic crises and under IMF programs.     

Richard Nixon and Economic Nationalism in Latin America: The Problem of Expropriations, 1969-1974

During the late 1960s and early 1970s, the Nixon administration confronted the problem of how best to protect US economic interests in Latin America during a period of rising economic nationalism. After extensive debate, the president approved a policy designed to deter expropriations and rein in nationalist economic sentiment by threatening to terminate US and international financial assistance to countries that expropriated American holdings without prompt and adequate compensation. As it turned out, however, this policy was little short of a disaster. Nixon's stance heightened American unpopularity during a period when US credibility in Latin America was already on the wane, and failed to have any restraining effect on either the number of expropriations by Latin American countries or the strength of economic nationalism in the area. Informed by domestic and bureaucratic pressures and the same ideological proclivities that have long characterized American relations with the underdeveloped world, Nixon's policy on the expropriations issue ultimately proved ineffective and even pernicious to US interests in Latin America.     

Ideas and interests in global financial governance: comparing German and US preference formation

Financial crises underline the necessity for more effective global governance. Despite the creation of the Basel II Accord, no agreement has been reached on the reform of the International Monetary Fund (IMF). Why do governments only selectively agree to reform global governance? I argue that convergence and divergence of governmental positions cannot be explained solely by the logic of the international system, institutions or globalization. Instead, they strongly reflect domestic ideas and interests. Furthermore, the ability of governments to compromise internationally is influenced by the different impact of domestic ideas and interests. With regard to their prevalence in domestic preference formation, ideas prevail when governance affects lobby groups diffusely and poses fundamental questions on the role of politics in governing the economy. Interests prevail when lobby groups are affected directly and new governance concerns a specific distribution of costs. These arguments are tested on the preference formation of the United States and German governments on the IMF and Basel II.     

拉美国家现代化与美洲国际秩序民主化——对美拉关系发展中三大标志性“峰会”的考察及思考

由美国主导的、已有120年历史的泛美联盟组织,由于其内存逻辑的矛盾而造成的美洲国际秩序民主化功能的缺失,未能为拉美国家现代化创造良好的外部条件,导致泛美联盟危机屡屡出现。2010年2月,墨西哥坎昆团结峰会决定组建无美的拉美和加勒比国家共同体,以推进拉美地区一体化,进而加速拉美国家现代化,这是一种明智的战略性选择。本文从拉美历史嬗变的视角,阐明经济全球化背景下的国家现代化不完全是单纯的国家工程,它需要有良好的国际环境和条件,要求与改革旧的游戏规则、推进国际秩序民主化相衔接。尽管这一过程可能十分复杂、曲折,但这一历史趋势不可避免,其前景是看好的。     

Systemic Conditions and Security Cooperation: Explaining the Persistence of the Nuclear Non-proliferation Regime 1

This article analyzes systemically the understudied topic of why and how the nuclear non-proliferation regime has remained a sustainable, even expanding entity, despite the unequal status of its members, and the fragility of international regimes as a species. The author argues that the convergence of two sets of distinct interests derived from the systemic roles and preferences of nuclear 'haves' and 'have-nots' has determined the creation and sustenance of the regime. For the nuclear-armed major powers the key factors that facilitate cooperation are the preservation of monopoly rights to possess nuclear weapons and the denial of similar rights to non-major power states. For most non-nuclear states, the regime's norms and principles render an important constraint against nuclear acquisition by their neighbors and a powerful normative restraint against nuclear use by the nuclear weapon states. This unique combination of interests and norms explains why the regime has persisted despite predictions of its demise. The larger theoretical implication is that favorable systemic conditions and system-induced interests have to be present in order for a multilateral security regime to emerge and persist. Conversely, when these favorable systemic conditions change, the regime is likely to weaken or dissipate.     

Unpacking Autocracy: Political Regimes and IMF Program Participation

Why do some countries participate in IMF programs while others refuse to do so? We suggest an answer to the question by unpacking one side of the typical democracy–autocracy dichotomy. Specifically, we utilize the growing literature on the varieties of authoritarianism to develop an argument linking the different incentives and constraints that leaders in party-based, personalist, and military regimes face when considering whether to sign agreements with the IMF. Empirically, we demonstrate that distinguishing among autocracies uncovers important variations in the sensitivity of such regimes to the political costs incurred by IMF participation. Party-based autocracies, for instance, respond to both sovereignty costs and the benefits of program participation during severe economic crises. Personalist regimes, however, are not sensitive to the sovereignty costs incurred with IMF participation and thus only participate when doing so provides needed revenue during economic crises. The unique features of military juntas, by contrast, suggests that such regimes are not sensitive to either of these political costs and thus do not respond to economic crises in the same way as their autocratic counterparts.     

Selection Effects and Deterrence

The empirical question of how often deterrent threats issued during international disputes succeed has been hotly debated for years, with some researchers arguing that virtually no robust cases of success can be identified. I argue that what appears to be an empirical and methodological debate actually arises from the inadequacy of classical rational deterrence theory, which fails to comprehend the implications of states' strategic self-selection into international disputes. Rational self-selection is shown to imply that in a sample of crises, deterrent threats issued after an initial challenge will tend to fail in precisely those cases where they are relatively most credible signals of an intent to resist with force. The product of a selection effect, this paradoxical implication allows a resolution of the debate on the efficacy of deterrence in crises. And because selection effects can arise whenever a historical "case" is the product of choices by actors who also influence the outcome in question, this example from the study of deterrence has broad relevance for empirical research.     

“Systemically Significant States”: Tracing the G20’s Membership Category as a New Logic of Stratification in the International System

ABSTRACT

The international system has long distinguished classes of states, such as “great powers”. Recently, “systemically significant states” has emerged as a new designation within global financial governance. This designation was introduced by the G7 to justify the new membership composition of the G20, and has since been adopted in policy documents and recommendations by other institutions, such as the IMF. This article traces the origins of the term “systemically significant” and argues that, although nominally meant to be a term of inclusion and a signal of the pluralisation of governance authority, it instead serves as a new category of stratification rooted in a neoliberal governmentality of risk.     

面对“中等收入陷阱”:中国和拉美的选择——中国社会科学论坛(2012年国际问题)“变化中的世界经济:中国和拉美及加勒比的选择”综述

2012年5月8日,中国社会科学论坛(2012年国际问题)在北京新闻大厦隆重召开。作为中国社会科学院的学术品牌之一、中国唯一的拉丁美洲和加勒比问题年度国际论坛,本论坛从2005年至今已经连续举办了八届,此次年度论坛的主题是     

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.     

IMF retrospective and prospective: A public goods viewpoint

The paper investigates changes in IMF activities using the analytical framework of international public goods. The IMF promotes international financial stability, whose outputs are joint products with varying degrees of publicness. In recent years, IMF loans (recipient-specific benefits) have assumed decreased importance, while the Fund’s technical assistance and monitoring activities have taken on greater importance. As a consequence, the club and purely public outputs (e.g., disseminating best practices) have grown as a share of IMF activities. Changes in the mix of IMF activities alter the mix of international public goods and, in so doing, change policy recommendations regarding the role of IMF. The future of IMF is also addressed, especially in light of increased private capital flows.

An ‘Aladdin's lamp’ for free enterprise: Eisenhower,fiscal conservatism,and Latin American nationalism, 1953–61

This study explores the Eisenhower administration's efforts to promote free trade and investment policies in Latin America. US officials believed that private capital investment, rather than US foreign aid, would best promote Latin American economic development and improve its abiliry to purchase American products. By eliminating the need for foreign aid, Latin American economic autarky complemented Eisenhower's zeal for fiscal conservatism. Although most scholars have focused on the primacy of anti-communism in Eisenhower's inter-American policies, this study contends that economic nationalism posed the greatest threat to Eisenhower's policies. US officials eventually responded by expanding aid to Latin America, but the additional economic aid was always intended to complement private capital, rather than replace it. This article, based upon the papers of influential administration officials and State Department records, sheds considerable light as to why the United States promoted free trade and investment policies in the developing world, as it still does today.     

大国安全与地区发展的悖论?——基于冷战早期美拉关系的考察

为了遏制共产主义的发展,战后初期美国积极在西半球编织反共防务安全体系。与此相比,美国对拉美国家的经济援助需求消极怠慢,对它们所面临的经济发展问题视而不见,采取了“贸易而非援助”的经济政策,激化了美拉矛盾。20世纪五六十年代,一些拉美国家实行了国有化和土改等民族主义改革,并同苏联加强贸易往来,反美反独裁的游击运动风起云涌。在美国看来,这与其在西半球的经济安全和反共战略相悖。为了化解危机,美国一方面以反共和集体安全为名,对“敌对”政权进行军事干预,另一方面也在不断调整自身政策,加大对拉美国家的经济援助力度。不论怎样,谋求和巩固在西半球的霸主地位始终是美国制定拉美政策的根本目的,安全和稳定是其维护的主要利益。在理论上,只有拉美国家的深层经济发展问题得到有效解决,才能消除不稳定的隐患,所以,美国国家安全与拉美地区发展是并行不悖的。但在现实中,由于拉美国家的既得利益集团与美国关系密切,美国不可能切实推进拉美国家的经济改革,同时美国又常以安全防务政策化解由经济发展引发的拉美问题,这种立场上的偏差注定了美国提出的经济改革方案的“无效性”,而仅仅是一种权宜之计。     

“India's Rasputin”?: V. K. Krishna Menon and Anglo–American Misperceptions of Indian Foreign Policymaking, 1947–1964

From 1947 until his political demise in late 1962, Vengalil Krishanan Krishna Menon stood at the forefront of India's international relations. One of Indian Premier Jawaharlal Nehru's closest political confidantes, Menon served variously as India's High Commissioner to the United Kingdom, leader of its delegation to the United Nations, self-styled mediator in the Korea, Indo–China, and Suez crises of the 1950s and, from 1957, his country's Defence Minister. Vilified in the West as “India's Rasputin,” Menon's left-wing credentials, anti-colonial rhetoric, and willingness to engage with the Communist bloc were seen by Anglo–American diplomats as a threat to Western interests in South Asia. Drawing upon recently released British and American archival records, this article argues that Western misperceptions of Menon, and his role in the Indian foreign policy-making process, undermined Anglo–American relations with India for much of the early Cold War.     

IMF program compliance: Aggregate index versus policy specific research strategies

Consensus has grown that the economic reform programs of the International Monetary Fund (IMF) have failed to promote economic development. There is little consensus about how IMF programs should be reformed, however, because we do not understand why IMF programs have failed. Some critics contend that the IMF’s austere policy conditions are inappropriate for most program-countries and cause economic crises to deepen. Other critics argue that the policy conditions are actually ignored, and the IMF program loan ends up subsidizing the bad policies that caused the economic crises in the first place. This debate begs the compliance question. Unfortunately, the study of IMF compliance is not straightforward. IMF agreements span many dimensions, and the dimensions vary from agreement to agreement. Even along one dimension, governments are not held to the same standard. Rather than look at aggregate measures of compliance, this article proposes a return to studying specific conditions as was done in the earliest studies on IMF compliance.      

Grasping the Commercial Institutional Peace

While the commercial institutional peace research program provides empirical evidence that international institutions, especially preferential trade arrangements, help reduce the incidence of militarized inter-state conflict, it fails to delineate clearly how such institutions matter. Building from the logic that low opportunity costs for fighting, private information, and commitment problems constitute important causes of war, this article explores three interrelated causal mechanisms. First, the state leaders' increased expectations about future commerce create an incentive for these actors to consider peaceful bargains as an alternative to costly war. Second, security coordination under the umbrella of a commercial institution provides fuller information about state military capabilities, thus making inter-state bargaining for dispute resolution more efficient. Third, in bringing together high-level state leaders on a regular basis, commercial institutions may create the trust necessary to overcome commitment problems in inter-state bargaining. I explore how these mechanisms have operated within the Gulf Cooperation Council and the Economic Community of West African States.