Role Of International Financial Institutions Research Articles

Contracting arrangements and public private partnerships for sustainable development

This paper extends the discussion of the investment cycle in Ahmad (2017) (G24 paper), in which the questions concerning what to invest in and where are addressed. This paper examines the how of investment for sustainable development, focusing on options for contracting arrangements, such as PPPs, that would help to involve the private sector, manage risks in the presence of asymmetric information, as well as uncertainty about climate change. It also addresses the strengthening of national and local institutions and the possible role of international financial institutions. In discussing the investment options, the paper also updates a G24 review of the empirical and theoretical literature on involving the private sector involvement in public investments (Ahmad et al., 2018).

Economic Inequalities in Latin America at the Base of Adverse Health Indicators.

There is increasing evidence supporting the existence of a link between income inequalities and health outcomes. The main purpose of this article is to test whether economic inequalities are associated with poor population health in Latin American countries. Multi-country data from 1970 to 2012 were used to assess this question. The results show that the Gini coefficient has a strong correlation with health outcomes. Moreover, multiple linear regression analysis using fixed effects shows that after controlling for gross national income per capita, literacy rate, and health expenditure, the Gini coefficient is independently negatively associated with health outcomes. In Latin American countries, for every percentage point increase in the Gini coefficient, the infant mortality rate grows by 0.467 deaths per 1,000 live births, holding all other variables constant. Additionally, an ordinary least squares estimation model suggests that countries that do not use International Monetary Fund loans perform better on health outcomes. These findings should alert policymakers, elected officials, and the public of the need to fight income inequalities and rethink the role of international financial institutions that dictate state policies.

Neoliberalising Cambodia: The Production of Capacity in Southeast Asia

The current Cambodian experience of re-integration into the regional and global economies reveals a process of violent neoliberal accumulation. Under the guise of clean, frictionless neoclassical economics, neoliberalism has reformulated the role of state and society. This article examines how notions of ‘capacity’ or ‘capacity-building’ reflect a commitment to this understanding of economic systems. Market building and deepening, which involve the expansion and regulation of ‘capacities’, are intrinsically tied to this commitment. It is argued that technocratic, administrative, and pseudo-scientific discursive acts are central to the production and reproduction of neoliberal agendas. This is evidenced by the complicit role of international financial institutions, the Cambodian state, civil society groups, and governance structures more generally. Yet the ever-deepening roll-out of neoliberalism in Cambodia is far from complete. What is evident is that this unique proto-regulatory environment reveals the poverty that surrounds the call to increase or develop ‘capacity’. Importantly, the article concludes that the whole process of producing space and capacity is not a neat and linear set of affairs. The world of abstractions and dominant discursive acts cannot completely subsume the lived experience of the everyday.

International Financial Institutions (IFIs) and Sovereign Wealth Funds (SWFs) as instruments to combat corruption and enhance fiscal discipline in Developing States

Especially since the start of the second decade of the twenty-first century, once more we have seen more focused interest in the use of SWFs by home states—less as a means of projecting sovereign financial power outwards and more as a means of internal financial management, and development. What makes this interesting from the perspective of SWF development is the role of International Financial Institutions (IFIs) in SWF development. This article takes a first look at the way in which IFIs have also begun to use SWFs in their interactions, with a emphasis on developing states. A review of some recent efforts to establish SWFs with a stabilization or development focus suggests the way in which these funds now may better serve the project of fiscal and governance internationalization, and the development of global policy coherence around the fiscal ideologies of IFIs, rather than as an instrument of national policy. Part II briefly sketches the IFI's interest in and approach to SWFs as a part of their inve...

Development in a Multi-Polar World: The Post-2015 Agenda

This annual review highlights some of the new areas of concern for the development community and new areas of research. Part I discusses the global financial crisis, its causes, developing country responses and the implications for development going forward. Part II considers the growing literature on middle-income countries. Part III looks briefly at low-income countries, whether the recent increase in growth in Africa is sustainable, and the literature on post-conflict reconstruction. Part IV examines the proliferation of new models for the post Washington Consensus, post Beijing Consensus era. Part V presents some critiques of development models and the development field more generally. Part VI summarizes the ongoing efforts to come up with a Post-2015 development agenda. Part VII considers the changing role of international financial institutions.

International Financial Institutions (IFIs) and Sovereign Wealth Funds SWFs, Internal Improvement and the Socialization of Developing States

Especially since the start of the second decade of the twenty-first century, once more we have seen more focused interest in the use of SWFs by home states — less as a means of projecting sovereign financial power outwards and more as a means of internal financial management, and development. What makes this interesting from the perspective of SWF development is the role of international financial institutions (IFIs) in SWF development. This article takes a first look at the way in which IFIs have also begun to use SWFs in their interactions, with a emphasis on developing states. A review of some recent efforts to establish SWFs with a stabilization or development focus suggests the way in which these funds now may better serve the project of fiscal and governance internationalization, and the development of global policy coherence around the fiscal ideologies of IFIs, rather than as an instrument of national policy. Part II briefly sketches the IFI’s interest in and approach to SWFs as a part of their investment, capacity building and rule of law toolkits. Part III then reviews the manifestation of this approach in the development of SWFs in a number of developing states. The article suggests ways in which stabilization and development SWFs may better serve financial globalization than the particular interest of states establishing them precisely by transposing global standards of fiscal and governance behavior into the internal workings of states. In this sense, development and stabilization SWFs serve as an instrument of globalization from the top down (through IFI policy operationalization) perhaps as effectively as SWFs that seek to project national financial power through private market investments abroad. But it also creates the possibility of divergence in SWF character as the consequences of the use of SWFs as governance devices may produce substantial deviation from the traditional organizational parameters of SWFs as instruments of macroeconomic policy.

The consequences of global trade and financial disbalances in contemporary economy

The aim of this paper is to critically examine free trade, free flow of goods and capital, as well as the possibility of using privileged market position and economic and political measures that stem from it. The critical review is based on the fact that not all economies (countries) that enter international trade benefit from it. Countries participate in world trade in order to achieve current account surplus and to attract international capital which will increase their employment and production. Given that, all countries cannot have surpluses at the same time, some have current account deficits. Economies with deficit are usually in crisis and their employment and production will fall beyond the level of countries that do not engage in international exchange. Accordingly, this study is based on an analysis of global economic disbalances and the role of international financial institutions (WTO, IMF and World Bank) in promoting them.

Bulgaria’s EU Funds Absorption: Maximizing the Potential!

This paper focuses on EU structural and cohesion funds assistance to Bulgaria during the 2007–13 program period. Initial weaknesses resulted in a low absorption rate, which was mitigated by increasing advance payments; applying electronic application and reporting procedures; simplifying and unifying tender processes; and strengthening the role of international financial institutions and banks in project preparation, evaluation and monitoring. The possible impact on growth and potential output is briefly discussed, while the risks of improper absorption are acknowledged. Valuable lessons have been learned, but it is recommended that additional steps be taken for the next program period 2014–20.

Bulgaria's EU Funds Absorption: Maximizing the Potential!

This paper focuses on EU structural and cohesion funds assistance to Bulgaria during the 2007–13 program period. Initial weaknesses resulted in a low absorption rate, which was mitigated by increasing advance payments; applying electronic application and reporting procedures; simplifying and unifying tender processes; and strengthening the role of international financial institutions and banks in project preparation, evaluation and monitoring. The possible impact on growth and potential output is briefly discussed, while the risks of improper absorption are acknowledged. Valuable lessons have been learned, but it is recommended that additional steps be taken for the next program period 2014–20.

Oil and Debt Management in Nigeria

Nigeria’s debt at independent was put at about N488.8 million which was mainly long-term development soft loans. The world economic recession and fall in price of oil in 1982 were identified as major factors that led many countries to debt crisis. Nigeria’s debt accumulated due to gross mismanagement of resources and loans contracted as well as failure of governments to keep-up with repayment schedules. This paper assesses the management of Nigeria’s debt. It examined the role of International Financial Institutions (IFIs) in discussing the politics of Nigeria’s debt management vis-à-vis motivational factor behind consideration for loans, disbursement and at what rate? The paper employed both primary and secondary sources of data. Primary data was sourced from Debt Management Office, National Bureau of Statistics, Central Bank of Nigeria and National Institute for Social and Economic Research while secondary data was sourced from journals, books, official government gazettes and internet. Data was analyzed using descriptive method. The result of the analyses revealed that 79% of the respondents agreed that Nigeria’s oil contributed to its huge debt accumulation and denied it debt cancellation. Also 65% believed that government has been prudent in managing the nation’s debt with every action taking in the interest of the people even when it failed to keep up with repayment schedules. The dependency theory formed the basis of discussion and analyses in this work. It concluded that, oil was a major factor behind the granting of loans to Nigeria as well as responsible for fiscal irresponsibility on part of the government which led to the failure of efficient management of such loans. This paper recommended that there should be prudent management of the economy while all forms of corruption must be eradicated to bring about real development.

Resisting Dispossession: Indigenous Peoples, the World Bank and the Contested Terrain of Policy

Over the past several decades, prominent international financial institutions (IFIs) have come to be seen as iconic representations of neoliberal globalization associated with a hegemonic definition of development. While the dominant discourse is one that justifies some negative environmental and social outcomes as a logical cost of development, the spotlight on the impacts of development projects in the recent past has led many multilateral development banks to reassess their existing social and environmental policies, or, in some cases, to develop new ones. This article traces the history of the World Bank’s review and revision of its policy related to Indigenous Peoples as well as its lending for projects related to extractive industries. The goal in using these specific cases is to elucidate some of the political dynamics associated with international development and the role of IFIs. The analysis of recent IFI-based policy reviews is used to draw conclusions about current and near future implications of the policy terrain regarding the World Banks’ continued emphasis on extractive industries (Bebbington et al 2008: 889) and its more recent involvement in projects associated with climate change mitigation. Using the case of the Bank’s policy reviews, I analyze the ways in which Indigenous Peoples have engaged in the process of defining the World Bank’s policy terrain that has more than semantic consequences. While the World Bank has attempted to maintain policies that facilitate accumulation through dispossession (Harvey 2003), Indigenous Peoples have strategically resisted this process by deploying a “rights-based” discourse (related to land tenure, governance dynamics, and “self-determination”) that is being codified in other international policy-making processes. Specific examples of interactions between the World Bank and Indigenous Peoples illustrate the tension between discourses of capital accumulation and environmental or social responsibility.

Facilitating corruption and human rights violations: the role of international financial institutions

The connection between corruption and the suppression of human rights has been recognized by scholars of human rights, state and state-corporate crime, non-governmental organizations, the United Nations as well as various governments. Scrutiny of governmental and/or regime corruption has been a primary focus, in relation to barriers and/or violations of human rights. Additionally, multinational companies’ complicity in corruptive policies and practices has raised concerns, in particular in the arms and natural resources sector. Glaringly absent, however, within the criminological literature are discussions of, and research on, the role of international financial institutions (IFIs) in relation to high levels of state corruption, save for the relatively little criminological research that has explored how cooperative endeavors between international financial institutions, transnational corporations, and states often result in demonstrably harmful activities as a result of structural adjustment policies. As such, it seems appropriate to consider how certain components and/or policies of IFIs facilitate rather than constrain corruptive practices by regimes, militias, paramilitaries, and transnational corporations. Such an exercise is not only important for its etiological contributions, but also to draw criminological attention to this phenomenon and because these organizations have stated a commitment to reducing state level corruption. I hope to extend the focus and insights of criminological analysis of crimes of globalization herein.

Bridging the ASEAN Development Divide: A Regional Overview

I. Introduction Individually and collectively, Southeast Asian countries have set very challenging economic goals. The Ninth Malaysia Plan, for example, targets the country to be a fully developed economy by 2020, eradicating hardcore poverty. This will require over the next few years GDP growth of 6 per cent, higher than recent experience. Collectively the members of ASEAN have committed to economic integration of the region--to establishing the ASEAN Economic Community (AEC). This will require thorough-going and co-ordinated liberalization of markets and harmonization of national rules and regulations. The experience both in the region and in other parts of the world suggests how difficult it is to realize such a goal. This paper examines the context for development in Southeast Asia, highlighting two themes: * Investment: In the short run, investment spending directly supports aggregate demand and growth. In the longer term, investments in infrastructure, in productivity enhancements by businesses, and in the public provision of education and health services determine the potential for growth. This type of spending is also a factor in the ability of firms and individuals to compete in the international marketplace. With the possible exception of Vietnam, across the region, there is simply too little investment to meet national and regional development goals. * Co-operative Norms: Southeast Asia needs to provide both a wider regional market and the policy environment that will allow firms and individuals to participate more fully in international marketplaces. ASEAN as an organization has provided a forum for this, particularly looking towards the formation of the AEC. One aspect of this will be the investment in infrastructure to link hitherto fragmented regional markets. Section II of the paper discusses broadly regional economic performance and policy: growth and the impact on poverty, investment trends, fiscal policy, and inflation. Second III reviews issues related to encouraging higher potential for growth through the provision of infrastructure, higher levels of private investment, supporting education and health, and addressing environment practices. Section IV examines efforts towards regional economic integration, especially the proliferation of trade agreements and the role of international financial institutions in promoting regional cooperation. II. Recent Economic Performance: Growth, Investment, Fiscal Policy, and Inflation II.1 GDP Growth and Poverty Reduction Growth in Southeast Asia in 2006 averaged 5.9 per cent, about one-half percentage point above 2005. (1) This is better than earlier projected. Economies worldwide appear more resilient than thought, facing high oil prices and concerns about sudden changes in international capital or trade flows proved so far unfounded. Only one country, Cambodia, showed significantly lower growth in 2006:6.3 per cent, less than half the 13.1 per cent in 2005. The exceptional growth in 2005 was largely due to strong agriculture sector production, itself a result of unusually good weather, which returned to more normal conditions in the following year. Figure 1 shows the 2006 experience along with average annual growth for the first six years of the decade for most of Southeast Asia. In an arithmetic sense the development divide is being eased as growth rates are generally higher in the less developed countries. Over 2000-2006, the poorer developing countries, (Cambodia, Lao PDR, and Vietnam) saw average annual GDP growth rates ranging from 6.3 per cent to 8.3 per cent, while the remaining developing countries (Indonesia, Malaysia, Philippines, and Thailand) exhibited a range from 4.6 per cent to 5.3 per cent. A growth differential of 2-3 percentage points can make a large difference over a long period of time. However, if one targets the ASEAN milestone year of 2015, when the AEC should be established, while the income differences between the two groups of countries may shrink in relative terms, the development gap will still loom huge. …

Is Market Capitalism Possible Under the Moral Economy of Africa: How the IFIs Can Help

The question has been asked severally: Can Africa's moral economy, that is, Africa's present economic situation, support large scale capital accumulation that can create wealth and economic prosperity? The answer to this question has never been simple, nor direct, nor without ambiguity. In the past, the established position is that African development within its own cultural and historical antecedents is a mission impossible. Africa can develop so far as it is willing to adopt modernization which is inherently self - alienating. But the new thesis advanced by Mkandawire and Soludo (1999) challenges this pessimism and argues that market capitalism is possible in Africa despite its moral economy. This paper exposes this debate to new light by taking an insightful look at the present realities of the moral economy in Africa, highlighting its strengths and weaknesses. This offers the basis for re-considering the prospects of capitalist accumulation within the moral economy. Given the interest the moral economy is recently generating, we deem it necessary to question whether it is possible for this economy to support capital accumulation, which of course, is the sine qua non for economic development or is the moral economy just the refuge of the poor? In the light of these, we will attempt to reconsider the role of International Financial Institutions, such as the World Bank and IMF, in providing assistance to this economy to overcome the obstacles to development.

AN INTERVIEW WITH ANNA J. SCHWARTZ

AN INTERVIEW WITH ANNA J. SCHWARTZ

Globalization, Imperialism and Regulation

This paper challenges the idea that globalization should be viewed as a damaging western ideology. Rather than being an expression of US imperialism, the benign process of globalization is threatened by the unwillingess of the US to maintain its Pax, whilst simultaneously attempting to legislate the affairs of the world through a form of 'ethical imperialism'. The argument is developed through an examination of the debate over global public goods, in particular the maintenance of peace, and the role of international financial institutions in dealing with recurrent financial crises.

Of liquid dreams: a political ecology of water privatization in Buenos Aires

The privatization of water and sanitation in Buenos Aires has been hailed by its neo-liberal proponents as an unprecedented success. This paper takes a deeper and more critical look than many of these accounts. It looks at political and economic changes within Argentina in order to explain the troubling findings regarding the performance of Aguas Argentinas, the private company that won the concession for most of Buenos Aires. The paper begins with a brief overview of the political and economic context in Argentina before describing the process involved in the water privatization in Buenos Aires. It then discusses the outcomes, including changes in coverage and charges to end users as well as impacts on labour and the environment. The paper describes how the promised reduction in water tariffs did not materialize (in fact the opposite occurred) and how agreed-upon targets for expanding sewerage connections and sewage treatment were not met. It also describes how the national government intervened to support the water company in conflicts with the regulatory agency and even by-passed the regulatory agency when the water company wanted to renegotiate the contract. Finally, the role of international financial institutions in this process is discussed.

Sovereignty, developing countries and international financial institutions: a Reply to David Williams

In his article Aid and Sovereignty: Quasi-States and the International Financial Institutions, David Williams, ‘Aid and Sovereignty: Quasi-states and the International Financial Institutions’, Review of International Studies, 26:4 (2000), pp. 557–73.David Williams claims that ‘(t)he activities of the IFIs [international financial institutions, RL] in their relations with many developing countries certainly suggest that the substance of state sovereignty does not amount to very much more than a show’ (p. 573). In my reply, I beg to differ with respect to the causes of the changing state sovereignty in developing countries and the role of international financial institutions, and of the World Bank in particular, in this process.However, as Stephen Krasner has sophistically shown, the violation, compromise and truncation of sovereignty has been a central feature of international relations since the very inception of the ‘Westphalian system’ in 1648. See Stephen D. Krasner, Sovereignty: Organized Hypocrisy (Princeton, NJ: Princeton University Press, 1999).By offering a comparison concerning the structure of the interactions developing countries have with the IFIs and private capital markets, respectively, I conclude that the relationship between developing countries and private capital markets has more substantial effects on the changing nature of state sovereignty in the developing world.

Globalisation, imperialism and regulation*

This paper challenges the idea that globalisation should be viewed as a damaging western ideology. Indeed, it is argued ‘that globalisation should be examined using ‘positive’ economic methodology, which allows for an objective assessment of its effects, and that as a process it cannot even be conceived of as ideological. Rather than being an expression of economic American imperialism, the benign process of globalisation is threatened by the United States’ unwillingness to maintain its hegemonic position, its ‘Pax’, whilst simultaneously attempting to legislate the affairs of the world, through a form of ‘ethical imperialism’. This argument is developed through an examination of the debate over global public goods, and in particular through a study of two key areas: the maintenance of peace, and the role of international financial institutions in dealing with recurrent financial crises.

Rules and Authorities in International Monetary Arrangements: The Role of Central Banks

The discussion about new international financial architecture in the last several years is the most extensive debate about international monetary reform since the 1960's. The motivation for the current debate has been the sharp declines in GDP that resulted from the recent financial crises in Mexico, Thailand, Indonesia, and South Korea. The 1990's debate about international monetary reform differs from the earlier debate in two important ways-one is certainly important and the other may be important. In the 1960's there was a clear identification of the problem that had to be resolved; a mechanism was needed that would enable Germany, Japan, and numerous other countries to satisfy their demand for international reserve assets without inducing a persistent U.S. payments deficit. The problem involved the consistency between the demand and supply of reserves at a global level. In contrast, currently there is no agreement on the problem that must be resolved, as is strikingly evident from the diversity of proposals to reform the architecture. One view is that capital flows are too volatile, another is that bank regulation in many countries is inadequate (transparency and accountability are the buzzwords), and a third is that exchange rates have been pegged when they should have been allowed to float. A fourth is that there is need for an international lender of last resort. The debate in the 1960's originated with individuals in the universities; for several years those in the financial establishment were reluctant to accept the definition of the problem. They slighted the connection between the increase in demand for international reserve assets in Germany, Italy, Japan, and a number of other countries and the U.S. payments balance. In contrast, in the 1990's the discussion of reform initially involved individuals in official institutions. The uniqueness of the recent events was the combination of the sharp sudden depreciation of national currencies and the large loan losses incurred by the domestic banks that appear to have been in the range of 15-20 percent of GDP in the affected countries. The extent of currency overshooting was more extensive than in any previous episode. The debate about whether the Asian Financial Crisis is primarily a domestic banking and real-estate crisis or instead primarily a foreignexchange crisis partly stimulated by the rapid move to financial liberalization still has not been resolved. At the onset of the crisis in each of the several countries, there was a severe liquidity squeeze; asset prices declined sharply. Asset prices increased as this squeeze abated, but these prices have renmained much below their levels prior to the crisis; the implication is that these assets were substantially overvalued prior to the crisis. Much of the discussion has involved the fit or consistency among unrest-rained cross-border capital movements, the exchange-rate arrangement (and particularly whether currencies are pegged or free to float), and the central-bank monetary policies. One theme is that currencies cannot be pegged if capital flows are not constrained; the interpretation is that floating exchange rates would be preferable to pegged rates. The dominant view is that the severity of the Asian crisis reflects the fact that the central banks were reluctant to permit their currencies to depreciate when the capital inflow declined. The three papers in this session represent a tripartite approach toward restructuring institutional arrangements: one part is the role of the exchange rates, a second part is the role of international financial institutions, and the third is the role of central banks. These three institutional components can be arranged in a hierarchy, and the key is the role of central banks and their choice of monetary policies, which in turn has implications for the preferred choice of the exchange-rate regime. The central question is * Graduate School of Business, University of Chicago, 1101 E. 58th Street, Chicago, IL 60637.