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.

Towards a contextual theory of innovation

A contextual theoretical strategy should be pursued to overcome past deficiencies in the study of organizational innovation. The strategy is likely to lead to greater success in efforts to promote innovation. The heart of this strategy is to define the types of innovation processes at work and the contexts in which they operate. There are at least three innovation processes at work which operate in contexts defined by organizational and environmental characteristics and by the type of innovation under consideration.     

INTERVENOR FUNDING AT THE FTC: BIOPSY OR AUTOPSY?

Intervenor funding, an innovative method for encouraging public participation in government rule-making, is examined by focusing on the experience of the Federal Trade Commission. The paper reviews the program's goals, the arguments of critics, and the perceptions of individuals and groups who applied for intervenor funding. The program's effects on both agency decision-making and on the applicants themselves are evaluated.     

COMMUNITY, BUSINESS ETHICS, AND GLOBAL CAPITALISM

The absorption of the cultural sphere into the commercial sphere signals a fundamental change in human relationships with troubling consequences for the future of society. From the beginning of civilization to now, culture has always preceded markets. People create communities, construct elaborate codes of social conduct, reproduce shared meanings and values, and build social trust in the form of social capital Only when social trust and social exchange are well developed do communities engage in commerce and trade…. When the commercial sphere begins to devour the cultural sphere … it threatens to destroy the very social foundations that give rise to commercial relations. ¹