IMF conditionality: An approach based on the theory of special interest politics

Financial assistance provided by the International Monetary Fund (IMF) and other International Financial Institutions (IFIs) aims to help member countries reduce their economic policy distortions. Because these distortions are endogenously generated, it is important to understand how IFI assistance interacts with the domestic political economy. In this paper, we review recent models of IFI conditional assistance that are based on the theory of special interest politics (Grossman and Helpman 2001). In these models, governments adopt inefficient economic policies and instruments because of lobbying by interest groups. IFI assistance helps reduce these inefficiencies, at least under perfect and symmetric information, and provided IFIs are representative of the general public in creditor and debtor countries. Factors limiting the effectiveness of conditional assistance as an incentive system are also identified. These are related to information asymmetries, the potential for political instability in debtor countries, and the IFIs’ own financial solvency.

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.

Operational oceanography in Indonesia

In 2005 Indonesian and European institutes joined to start the first step for the implementation of an Ocean Operational System in the Indonesian archipelago. The system will support the decision making process for the sustainable use of marine resources, providing useful information and added value products as well as a service for an improved management of the sea with high business impact to targeted groups as public authorities and commercial operators (coastal managers, fishermen, shipping companies). In this paper the System is shortly described with its potential benefits and economic and social impacts.

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International institutions and market expectations: Stock price responses to the WTO ruling on the 2002 U.S. steel tariffs

Many scholars assert that international institutions have little power to enforce laws, punish offenders, or force compliance. Others stress that international institutions are important actors, specifically in the regulation of international trade. In this paper, I show that the recent trade dispute over U.S. steel protection provides us with a critical case to evaluate the role of the World Trade Organization in settling trade disputes and specifically stabilizing expectations of market actors over future steel policy. I argue that stock prices can serve as an important tool in answering these questions. In an empirical analysis using daily steel stock prices, I find that during the 2002 WTO steel case, the WTO dispute mechanism helped market actors stabilize expectations of future trade policy.

Regional energy cooperation in North East Asia: Lessons from the European Experience

The three major oil importing countries of Northeast Asia—China, Japan and South Korea—are concerned about future security of energy supplies to fuel their dynamic economic activity. Currently all three countries are highly dependent on imports of oil from the Middle East, a region with inherent political instability. Russia’s rich reserves of oil and gas in Eastern Siberia and the Russian Far East offer an obvious alternative. Given the geographical proximity of Russia and its desire to increase its energy exports to Northeast Asia, there is huge potential for cooperation. So far there has been no real intra-regional cooperation and no common external policy towards Russia. Despite obvious differences between Europe and North East Asia, the European model of energy cooperation, developed over the past 50 years, offers some useful lessons.

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European presence in Indonesia

This paper describes the European Union (EU) presence in Indonesia. It firstly discusses the reorientation of EU relations with Indonesia. It might be argued that the reorientation has been supported dominantly by economic and political motivations as consequences of the EU’s internal dynamics (such as single market; CFSP), the global dynamics and the rise of inter-regionalism. Secondly, current economic relationships show that the EU presence has been very significant for Indonesian economy, in term of international trade, investments, foreign exchange rate, debt, development assistance and business activities.

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The implementation of IMF programs: A conceptual framework

IMF supported programs have conventionally been assessed by examining their effects on intermediate variables and final outcomes. More recently greater attention has been paid to their implementation, on the assumption that in order to work programs need to be implemented. Empirical studies have begun to include political economy variables in an attempt to explain implementation. They have used the concept of ‘ownership’ to provide a theoretical foundation. This paper provides an alternative and simple conceptual framework based on the marginal benefits and costs of implementation. It goes on to discuss policies that might be expected to improve implementation based on this framework.

EU-China relations: balancing political challenges with economic opportunities

During 2005, the European Union and China marked 30 years of diplomatic relations with much fanfare. Celebrations surrounding the anniversary however belied the fact that throughout most of this period the European Union and China remained largely aloof from one another. The strengthening of EU foreign policy over time, as well as the economic reforms and new outward orientation exhibited by China have changed the dynamics of the relationship. Both sides are increasingly recognizing the potential mutual benefits that can be accrued from a closer relationship. This paper assesses EU-China relations from both economic and political perspectives. In terms of economics, it is clear that the EU must build stronger relations with China if it is to accrue the benefits of access to an expanding market with over one billion people. To do so successfully however, the EU will have to reconcile the economic and political components of its foreign policy. The EU continues to challenge the Chinese government to reform its practices on a number of issues including human rights, democratic reform, and Tibet, all of which remain bones of contention. How the EU achieves the balance between political constraints and economic opportunities is the primary focus of this paper.

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From intergovernmental to global: UNESCO’s response to globalization

Whilst there is an ever-growing literature on the economic and political aspects of ‘globalization,’ at present there are few studies analyzing how intergovernmental organizations have reacted to this phenomenon. This article aims to fill this gap by analyzing the response to globalization of UNESCO, one of the least studied organizations of the UN constellation. Addressing the global orientation of some of the current programs, this article shows how a recent re-evaluation of scientific humanism—the main philosophical framework contributing to the creation of UNESCO—has influenced both UNESCO’s self-understanding and its understanding of globalization. Scientific humanism is a philosophical utopia that couples the advance of scientific knowledge with the diffusion of a common philosophical framework and promotes a universal system of education in order to establish a global community. Based on the philosophical appeal of a culture of peace based on science, humanism and human rights, UNESCO’s representation of globalization represents an intriguing example of how our global future may be conceived and, to some extent, realized.

IMF staff: Missing link in fund reform proposals

Current IMF reform proposals are preoccupied with changing governance structures by reallocating Executive Board chairs and quota shares and with expanding and altering the Fund’s surveillance role, but not enough attention has been paid to whether organizational change at the staff level is also needed. IMF staff have intellectual dominance and discretion in the design of loan conditionality, writing of surveillance reports, and provision of technical and policy advice. There are also clear internal and external criticisms of how the Fund’s organizational culture—that is perceived to be hierarchical, technical/economistic, bureaucratic, and homogeneous/conforming—negatively affects the Fund’s policy output and relationship with borrowing members. This article suggests altering ’how things are done’ at the IMF by making changes to recruitment and organizational structure.

Outside and inside competition for international organizations—from analysis to innovations

The analysis of the competitive environment of international organizations has been neglected in scholarly research. Both the external and the internal type of competition in international organizations are rather weak and their performance is far from ideal. To strengthen both types of competition, several tentative proposals are advanced. They range from the introduction of an international competition agency, competition rules, a monitoring institute, voucher systems, matching contributions, popular participation rights by citizens to the use of prediction markets and institutionalized devil’s advocates. These proposals are put forward to stimulate discussion and to advance new ideas about the design of international organizations.

Knowledge hubs along the Straits of Malacca

World history has known areas of relative isolation and areas of high intensity of cultural interaction. The Mediterranean Sea, the Silk Road or the Straits of Malacca can be cited as such crucial contact zones. Within these areas, centres sprung up that served as interfaces between cultures and societies. These “hubs” as we would like to call them, emerged at various points throughout the contact zones, rose to prominence and submerged into oblivion due to a variety of natural calamities or political fortunes. This paper assesses the rise and fall of trade and knowledge hubs along the Straits of Malacca from before colonialisation until today. Historical hubs of maritime trade and religiosity today increasingly establish themselves as educational and knowledge hubs. This leads us to speak of the Straits of Malacca as a chain of—not pearls—but knowledge hubs with Singapore as the knowledge hub in the region shining the brightest of all, as the data suggest. We aim to conceptually grasp this development by suggesting a model or at least a hypothesis about the rise and movement of knowledge hubs in general.

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Exit, voice, and loyalty in international organizations: US involvement in the League of Nations

Recent challenges to traditional international relations theory have questioned the nature of international organizations (IOs) as agents of powerful state-members and have examined various conduits through which non-state actors can voice their concerns. Yet little work has focused on participation in IOs when a powerful state’s official position contradicts the goals of actors within it. This article examines the archival record of American involvement in the League of Nations’ economic section to explore such a circumstance. I correct the prevailing historical view of American isolationism in the interwar period and argue that participation by advanced, industrial democracies can better be understood as combinations of exit, voice, and loyalty on the part of individual components of state and civil societies.

Explaining the European Parliament’s gains in the EU Constitution

The Constitutional Treaty, like each set of reforms since the Single European Act, would constitute another incremental increase in the European Parliament’s powers. But the Parliament did not get everything it wanted. What we do in this paper is investigate why the European Parliament tends to ‘win’ in some areas but not in others. We consider five possible explanations and test these theories by looking at the issues the Parliament promoted in the constitutional negotiations and the factors that determined whether the Parliament was successful or not in a particular area. We find that the Parliament gains power in areas where the governments delegate new powers to the EU and are uncertain about the consequences of this delegation. We also find that public support for the Parliament played a role in the extension of the Parliament’s powers in the Constitution.

Regionalisation, inter-regional cooperation and global governance

The contradiction between trans-boundary issues largely driven by globalisation and conventional authority based on sovereign state leads to the problem of global governance. Regionalisation emerges as a process in which nation states within geographic proximity take collective measures to cope with problems of global governance. With the increasing tendencies of regional cooperation, a new issue thus arises as to the interaction among regions. In fact, the more regionalized the world, the more necessary, enabled and willing for regions to construct connections with each other. Inter-regionalism and trans-regionalism therefore become a further step which regional blocks take to build one layer in the hierarchy of global governance. The paper takes the Asia–Europe Meeting as the case to analyze the above thesis. In the first section, it presents the observation that the global system is characterized with regionalisation, then analyzes the coordination problems facing regions interdependent upon one another and then formulates a modified framework for analysis of the Asia–Europe Meeting. In the second section of rational design, it analyzes the process in which Europe and Asia rationally establish the cooperation structure of ASEM as a means to tackle the coordination issues between the two regions. In the third section of governing globalisation, it discusses the effects and implications of ASEM’s contribution towards global governance mainly in ways of rationalizing international relations and strengthening regional identity in the era of globalisation.

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Agent permeability, principal delegation and the European Court of Human Rights

A growing body of international relations literature examines the delegation of state authority to international organizations. Delegation is a conditional grant of authority from a principal to an agent in which the latter is empowered to act on behalf of the former. This paper explores the effect of agent permeability to interested third parties on the efficacy of control mechanisms established by principals. Our central argument is that higher levels of agent permeability are likely to lead to higher levels of agent autonomy. Because of this, principals who face a potentially permeable agent are likely to delegate more cautiously—partially, in stages, or with clear limits. We illustrate our argument with a case study of the European Convention of Human Rights and its two principal institutions, the Commission and the Court. We find that principals (contracting states) historically delegated quite cautiously to the Court, clearly concerned about the Court’s autonomy. Court behavior in its first two decades reassured principals while increasing the Court’s permeability. Over time, that increased permeability increased Court autonomy in conjunction with the Court’s growing visibility and experience.

Voluntary multilateralism and institutional modification: The first two decades of Asia Pacific Economic Cooperation (APEC)

The voluntary multilateralism and consequent institutional weaknesses that have characterized Asia Pacific Economic Cooperation (APEC) since its inception in 1989 are explained by the multiple geo-political fractures that characterize the Asia Pacific, as well as bureaucratic constraints and the missed opportunities to incorporate civil society. The history of APEC is the on-going creative struggle between ambitious multilateralists and national-sovereignty realists. While APEC has fallen short of its most ambitious goals, it has achieved some notable results in the cognitive diffusion of values and information, policy innovation to promote economic integration, and institutional modification in response to trial-and-error learning and to global shocks. The normative conclusions suggest additional institutional reforms and substantive agendas consistent with a flexible, evolving voluntary multilateralism.

EU and Asian countries policies and programmes for the diffusion of sustainable energy technologies

The Asian region accounts for already over 40% of the global economy, and is becoming the world’s main manufacturing hub. Unprecedented changes in economic growth and trade in the last couple of decades have resulted in severe degradation of the regional, as well as the global environment that could offset the advantages that economic growth has brought to the countries and their populations. In this framework the need to deploy sustainable energy technologies is a key concern for the global community. This paper gives an overview of EU programmes and policies to develop sustainable energy technologies and the common barriers faced to technology implementation in EU and Asian countries. Following that, the approaches and mechanisms that are used internationally for overcoming the barriers to technology transfer and implementation are presented. After having assessed barriers to technology implementation and possible ways and programmes to help overcome them, the paper provides specific examples of success stories of how government policies and programmes, in combination with involvement of the private sector, can be effective in sustainable energy technology transfer and implementation in both EU and Asian countries. Finally, the opportunity that has recently arisen to enhance the introduction of sustainable energy technologies in developing countries through the development of programmes of related activities as CDM projects is presented and indicative mutual benefits for the strengthening of the EU Asian partnership are highlighted.

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Towards a theory of inter-organizational networking

This article combines inductive and deductive theory building to identify building blocks for a theory of inter-organizational networking, a phenomenon that has gained prominence in international relations, but is largely neglected by IR scholars. Organizational and network theory are identified as the major starting points for theory building. Hypotheses are generated from the network of Euro-Atlantic security institutions, which has become the most sophisticated network of its kind since the early 1990s. The article looks specifically at the genesis of dyadic inter-organizational relations and of entire networks, at the relevance of networking for policy output and at the system effects that networks have on individual organizations. The theoretical findings are presented so as to allow a transfer to other geographical and functional areas of networking.

Growth and productivity measures of China’s due to international trade: PRC’S experience 1970–1993

Solow’s Growth Model Solow (Q J Econ 70:65–94, 1956) and aggregate data are applied to estimates the increase in productivity due international trade and the resulting technical change and capital augmentation for the years 1970 to 1978 and 1978 (the beginning of the reforms and “open door” policy in China) to 1993. According this paper’s estimations the GDP per man hour in 1978 increased by 1.76 times for the year 1970, from $0.1233 in 1970 to $0.2169 in 1978, and in 1993 by 5.23 time that of 1978 to $1.1348 in 1993. For the period under study due to “open door” policy the GDP per man-hour more than quadrupled, and 76.18% of this increase was due to technical changes and the remaining 23.82 was due to capital augmentation. The paper consists of five sections. “Introduction” Section reviews some of the growth literature as well as looking at the macroeconomic measures of China’s economic performance since 1978 the beginning of the reforms. “Data” Section explains the data modifications. “Empirical results” Section portrays the empirical results and the next indicates conclusions. This paper is dedicated to the memories of Late Dr. Anthony D’Amato, who was a Professor at W. Paul Stillman School of Business at Seton Hall University South Orange, New Jersey.

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