The effects of IMF programs on U.S. foreign direct investment in the developing world

Given the popular wisdom that the U.S. government influences IMF policies and tends to support the business community, it might be expected that IMF programs benefit U.S. firms abroad and thus borrower nations are attractive destinations for U.S. foreign direct investment (FDI). Surprisingly, no study has tested the impact of IMF loans on U.S. FDI. Controlling for common explanations in the literature, we use a treatment effects model and interviews with IMF staff researchers to investigate whether countries under different kinds of IMF programs receive more U.S. FDI than countries not under IMF arrangements. Using panel data for 126 developing countries from 1980 to 2003, we find that IMF borrowers tend to be more attractive to U.S. investors but not all IMF programs have the same effect. Our findings suggest that differences in loan duration, the extent of borrower input in policy decisions, and loan amounts affect borrowers’ leverage with the Fund and the U.S.     

Jump-Starting Collaboration: The ABCD Initiative and the Provision of Child Development Services through Medicaid and Collaborators

Many policy problems require governmental leaders to forge vast networks beyond their own hierarchical institutions. This essay explores the challenges of implementation in a networked institutional setting and incentives to induce coordination between agencies and promote quality implementation. It describes the national evaluation of the Assuring Better Child Health and Development program, a state-based program intended to increase and enhance the delivery of child development services for low-income children through the health care sector, using Medicaid as its primary vehicle. Using qualitative evaluation methods, the authors found that all states implemented programs that addressed their stated goals and made changes in Medicaid policies, regulations, or reimbursement mechanisms. The program catalyzed interagency cooperation and coordination. The authors conclude that even a modest level of external support and technical assistance can stimulate significant programmatic change and interorganizational linkages within public agencies to enhance provision of child development services.     

Attitudes Toward Reform Among Provincial Russian Politicians

An American political scientist presents the results of a survey of 1, 280 oblast' and city deputies in five provinces of central Russia. The survey conducted in 1992, assessed support for reforms aimed at development of a market economy and a more democratic political system. Five scales, two economic (including one to determine views on accumulation of wealth) and three political, were developed to measure deputies' attitudes. In addition, the respondents' age, education, occupation, gender and incumbency were used to determine whether attitudinal variation could be explained by demographic factors. The findings are related to the current struggle over control of local resources. Journal of Economic Literature, Classification Numbers: H70, P20, R59.     

Coping with the Cuts? The Management of the Worst Financial Settlement in Living Memory

The scale of the cuts to local government finance, coupled with increasing demand for services, has led to unprecedented ‘budget gaps’ in council budgets. Arguably, two competing narratives of the trajectory of local government have emerged in which contrasting futures are imagined for the sector – a positive story of adaptation and survival and more negative one of residualisation and marginalisation. Drawing on case study evidence from three English local authorities, the paper distinguishes and provides examples of three strategic approaches to managing austerity – efficiency, retrenchment and investment. It demonstrates how and why the balance of these strategies has shifted between the early and later phases of austerity and considers the extent to which the evidence of the case studies provide support for either the survival or marginalisation narrative. The paper concludes by arguing that a third narrative – responsibilisation – captures more fully the trajectory of local government in England.     

Symposium Introduction: Local Responses to ‘Austerity’

This introduction to the symposium sets out the context for local government in the United Kingdom at the current time. It outlines the scale of the reductions in funding since 2010, showing how uneven these cuts have been across the country and the reasons for this. It also describes the increased exposure to risk of both local government and of the citizens and communities it serves. The central question for the papers which follow is how local government is responding to these twin challenges. The papers provide insights from a number of detailed studies of individual authorities, exploring the strategies adopted to manage in response. The analyses focus on the distributive consequences for individuals and communities, but they also reflect on the wider consequences for local government itself. A particular concern is whether local responses are changing as austerity moves from its initial to its later phase.     

The Expansion of Neoliberal Economic Reforms in Latin America

This article seeks to explain why most Latin American countries have expanded market-oriented reforms since the 1980s despite their generally disappointing economic results. To explain deepening liberal economic reform, we test panel data for 15 Latin American countries from 1980 to 1995, using Beck and Katz' panel-corrected standard errors regression. Controlling for several competing explanations, we find that, except under fragmented party systems, high inflation promotes the expansion of economic reforms. We then show how our results are consistent with Weyland's (1996) use of prospect theory as well as Rodrik's (1994) work on the distributional effects of high inflation.     

The effects of different entry modes of foreign direct investment on labor rights in the developing world

Although many studies have investigated the effects of foreign direct investment on labor rights in the developing world, no studies of which we are aware have considered how differences in the mode of entry—that is, mergers and acquisitions (M&As), cross-border joint ventures (JVs), and greenfield investments (GIs)—taken by multinational corporations affect labor rights in host countries. Using panel data for up to 113 developing countries from 1985–2002, we find that foreign firms that enter via M&As tend to have minimal, or slightly negative, effects on labor rights, whereas JVs and GIs support improvements in workers’ rights. Overall, the results suggest that the sectors and motivations associated with JV and GI modes of entry increase labor demand, improving the bargaining power of workers.