Political Economy Influences Within the Life‐Cycle of IMF Programmes

Increasing attention is being paid to political economy dimensions of the IMF's operations. However, up until now, the literature has lacked a systematic overview of how politics and economics interact in this context. This paper sets out to fill the gap. Its conceptual basis is that of the ‘life cycle’ of an IMF programme. What determines the decision to turn to the Fund for financial assistance, what determines the outcome of negotiations, what determines whether a country will come back to the Fund? Answers to these questions cannot be satisfactorily given by examining economics alone. The paper draws on existing evidence to provide an empirically based discussion of the issues involved. It also points the direction in which future research needs to go. Some of the policy implications of the analysis are also examined.     

Contagion Entrepreneurship: Institutional Support,Strategic Incoherence,and the Social Costs of Over‐Entry

Existing literature on the legitimizing role of institutions tilts toward a “more is better” perspective, proffering the notion that the liabilities of smallness and newness can be mitigated through institutional policies that foster acceptance, trust, and confidence. Although this may seem reasonable, even desirable, institutional munificence can trigger massive over‐entry, potentially causing unintended consequences and unwanted social costs. Using a data set of nearly six million transaction‐level decisions involving all 612 companies and 56,240 permitted projects from a complete industry history, I find that unforeseen costs arise when small, early‐stage firms substitute the legitimizing effects of institutional support for strategic coherence. The findings are surprising and significant. While institutional support for new markets does in fact generate a surge in firm formations, the ill effects of munificence are evidenced by indiscriminate, contagion‐style market entry by unfit firms that perform poorly, fail quickly, and leave a long trail of regulatory violations in their collective wake. The study offers opportunities for scholars, practitioners, and policymakers to reassess the core assumptions related to the benefits and costs of institutional support for new industries, firms, and entrepreneurs.     

The IMF After the Asian Crisis: Merits and Limitations of the ‘Long‐term Development Partner’ Role

We examine the view, espoused by a number of commentators in recent months, that the International Monetary Fund (IMF) should seek to withdraw from its long‐term lending operations, in the wake of the recent financial crisis in Asia and elsewhere, and restrict itself to its ‘core competency’ of preventing and where necessary lending into financial crisis. This view is based on a belief that such long‐term lending crowds out both private sector operations and short‐term IMF lending; and that it is ineffective, because of weaknesses in the IMF’s conditionality. Both of these propositions, we argue, can be challenged. In the poorer developing countries there is virtually no private sector to crowd out, and Enhanced Structural Adjustment Facility (ESAF) operations have been conspicuously successful, not only at promoting growth, but also at achieving structural changes not at all achieved by aid donors such as strengthening the tax base. Such changes inevitably require a longer time‐period than the standard three years of an IMF standby, not only in order to induce a production response but also in order to achieve the necessary measure of stabilisation and economic reform without imposing social pressures which wreck the production response. The latter argument is particularly powerful in middle income countries, and provides an argument for IMF support to these countries also whilst they are temporarily excluded from international capital markets. Often also a long‐term presence is needed to achieve effective leverage in short‐term operations. In such cases the IMF’s long‐term lending should be seen as preconditional to the success of, and not as an alternative to, its short‐term operations. We therefore argue for the retention of the Fund’s long‐term lending function; and for this function not to be transferred to the World Bank, which has less credibility in global financial markets and less comparative advantage in macro‐economic management. Measures are indeed needed to reduce the level of the IMF’s exposure to risk in poorer developing countries, but those, we believe, should consist of the preventive measures currently going on, and measures to increase the ratio of equity to debt, rather than measures which would jeopardise the progress in long‐term poverty alleviation capacity achieved by the Fund over recent years     

Managerial optimism and search

This paper proposes and tests a model of the influence of managerial dispositional optimism on the propensity to search. The model developed in this article was tested using a business simulation exercise and survey method. Results show support for the positive influence of optimism on search; in addition, the relationship appears curvilinear.     

Pricing IMF liquidity provision: The value of the IMF liquidity commitment

This paper presents a market-based framework for pricing the International Monetary Fund's commitment to provide liquidity assistance, accounting for the credit risk and the insurance benefit involved in such operations. It is based on the isomorphic correspondence between Fund liquidity and common stock put options. The illustrative numerical examples show that the value of this liquidity guarantee could range between several and three hundreds basis points depending on the borrower's creditworthiness, the volatility of capital flows to the borrowing country, and the amount of funds potentially needed to meet the borrower's external obligations.     

The IMF and the countries of Eastern Europe

The countries of Eastern Europe need to raise considerable finance not only in order to improve their balances of payments but also to adjust the structure of their economies over the long term to changed internal and external conditions. The adjustment measures require capital, but the Eastern European countries have only limited scope to broaden their own capital base. What actual or potential significance does the international Monetary Fund have for overcoming the difficulties of the CMEA countries in question?     

IMF Conditionality and the Intertemporal Allocation of Resources

This article analyzes the impact of IMF (International Monetary Fund) conditionality on the intertemporal allocation of resources in an emerging market economy. The study identifies a principal‐agent problem between the government of the emerging market and its citizens and shows that conditionality has the potential to mitigate the resulting misallocation of resources. Nevertheless, the analysis indicates that if IMF lending were influenced by geopolitical motives then the suboptimal allocation of resources would remain notwithstanding IMF conditionality.     

WTO与IMF的合作制度

WTO和IMF作为国际上两个十分重要的经济组织,也是大多数国家同时参加的两个组织,分管着国际贸易与国际货币金融领域。两大国际经济组织之间职能与政策方向的冲突以及由此而产生的合作问题,随着经济全球化、一体化的发展越来越突出。二者建立并正在进一步发展的合作制度,提出并在实践着“保证国际经济决策一致性”的目标。     

The debt crisis and IMF policy

The discussions anticipating the annual joint meeting of the IMF and the World Bank in Berlin this autumn have again drawn the increased attention of a broader public to the debt problems of the developing countries. Alternative groups are planning to hold an anti-congress, in which especially the role of the IMF and the World Bank in this connection are to be subjected to a critical examination. The following article describe the basic points of criticism.     

The Asian Crisis, the IMF and Dr Mahathir

While in the literature concerning the Asian crisis extensive coverage has been given to the course of events in the countries implementing IMF-supported programmes, scant attention has been paid to other countries that also suffered from the crisis. Potential alternatives to the IMF way of handling the crisis are thus in danger of being neglected. The project on which this paper is based was funded by the Indo-Dutch Program on Alternatives in Development (IDPAD) in collaboration with the Indian Council of Social Science Research (ICSSR).     

The Power of Two: Inclusive Growth and the IMF

For decades, mainstream economics has focused on increasing economic growth and accelerating cross-country convergence, while ignoring distributional concerns. However, the consensus has begun to shift, and recent IMF research has paid increased attention to inclusive growth and the detrimental macroeconomic effects of inequality. The IMF also recognises the threat posed by climate change and has begun to dedicate research to exploring ways to decouple carbon emissions from economic growth.     

IMF调高世界经济增长预测

国际货币基金组织(IMF)9月14日在新加坡发表的《世界经济展望》报告预计,世界经济2006年和2007年将分别增长5.1%和4.9%,均比该组织今年4月的估计上调了0.2个百分点。国际货币基金组织认为,支持这一良好增长前景的因素包括通货膨胀的压力将会成功地得到遏制、发达国家的内需增长     

The IMF and the countries of the Council for Mutual Economic Assistance

In November 1981 Hungary and, one week later, Poland applied for membership of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank). These applications have highlighted a subject which had been neglected for quite some time. This analysis deals with the problems and consequences which arise from the membership of countries of the Council for Mutual Economic Assistance (Comecon)—the economies of which largely conform to principles of central economic planning—in IMF, an institution organized according to market principles.     

国际货币基金组织大幅修正下调2009年经济预测

国际货币基金组织（IMF）在去年11月所发表的世界经济展望报告时，已经发出了令人不安的经济增长下降的预测。在那份报告中，国际货币基金组织预期2009年的世界经济增长将为2．2％。然而时隔仅仅不到三个月，2009年1月28日，货币基金组织在其发表的最新经济展望预测中，大幅下调了这一预测，将其更改为0．5％。这将是第二次世界大战以来的最低增长率。