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.     

The IMF’s adjustment concept

Both creditor and debtor countries ascribe an important medium-term role to the International Monetary Fund in tackling the debt problem. What possibilities are there for the IMF to exert influence and what use does it make of them?     

The international oil industry in the 1980s

Few industries have undergone such rapid changes during the last ten years as the international oil industry. During this decade, there have been radical changes in the conditions under which international oil companies acquire and trade crude oil. In addition to the changes in the upstream sector the two quantum jumps in oil prices have drastically altered the conditions of downstream operations. Since 1979 oil demand fell more sharply than total energy demand, thereby reducing its relative importance in the energy economy. These events initiated a far-reaching adjustment process which is likely to continue.     

Trade and growth in West Africa in the 1980s

The classical school regards international trade as the main engine of growth. But modern empirical studies have failed to show any simple and generally consistent correlation between foreign trade statistics and macro-economic aggregates such as savings, Investment, consumption and growth¹. The more generally accepted view is that development through trade where it occurred was partly the consequence of favourable internal environment. What are the prospects for growth through trade in West Africa in the 1980s?     

Did US safeguards resuscitate Harley-Davidson in the 1980s?

This paper examines US safeguards applied to the motorcycle market in the 1980s. After receiving temporary protection by means of a maximum tariff of over 45%, Harley-Davidson sales recovered dramatically. Simulations, based on structural demand and supply estimates, indicate that while safeguard tariffs did benefit Harley-Davidson, they only account for a fraction of its increased sales. This is primarily because consumers perceived that Harley-Davidson and Japanese large motorcycles were poorly matched substitutes for each other. Our results provide little evidence that safeguard provisions triggered restructuring in Harley-Davidson.     

The need for Positive Adjustment Policies in the 1980s

In view of the close relationship between macro-economic performance, structural adjustment and international trade, the OECD Council established in 1979 a programme of work on Positive Adjustment Policies. Under this mandate, a Special Group of the Economic Policy Committee (under the chairmanship of Dr. Hans Tietmeyer, presently Secretary of State in the Federal Ministry of Finance in Bonn) was to review the macro-economic, structural and international implications of industrial, regional, manpower and other micro-economic policies, and to examine the adjustment policies of individual member countries. This work resulted in a Ministerial Declaration in 1982 on Positive Adjustment Policies and in a Final Report of the Special Group which is to be published shortly. The following article by Prof. Wolfgang Michalski, who directed this OECD project, is a résumé of the main conclusions.     

European and world energy perspectives: the 1980s and 1990s

Substantial successes have been achieved since 1973 in increasing energy efficiency and substituting other fuels for oil. However, reliance on oil and oil imports remains high. The temporary easing on the oil market must not lead to complacency as any relaxation in energy policy efforts may well contribute to provoking the next oil price shock.     

UNCTAD V and the prospects for the 1980s

Since the establishment of UNCTAD in 1964 as a permanent organisation for the promotion of the developing countries' trade and development interests, the substantive issues and problems have remained more or less the same. Dr. Ezenwe analyses the reasons why a yawning gap exists between expectations and results and suggests a change of strategy for UNCTAD V.     

Financial Institutions and the Estate Agents Industry in the 1980s

The changes which have taken place in the estate agents industry in the 1980s have transformed it from one dominated by small local firms, to one where the major participants are large national financial institutions. Concentration in the industry has increased substantially over the decade and entry conditions are such that it is unlikely to decrease in the coming years. The main reason why the institutions have entered the industry appears to be to market their other services through estate agents. This situation raises problems in terms of whether agents will act in the best interests of their client.     

Audience Reaction to Commercial Advertising in China in the 1980s

This article reports findings from two surveys conducted in 1987: the first involved over 25,000 television viewers throughout China and the second interviewed more than 1,100 urban residents of Beijing. The surveys measured audience attitudes and behaviour regarding commercial advertising. This is the first time such information based on probability sampling in China has become available to western readers.

The results replicated one of the findings of an earlier study, which was based on a small-scale convenience sample, that Chinese consumers supported the return of advertising. But the support was less enthusiastic than previously thought; public opinion regarding commercial advertising appeared quite reserved and somewhat calculated. The data also suggest that mass advertising, especially television advertising, was an effective marketing tool, and that Chinese consumers paid more attention to the informational content than the entertainment features of the advertisements.

In conclusion, the authors argue that Chinese consumers were probably more sophisticated than they were given credit for.     

The Completion Rate of IMF Programmes: What We Know,Don’t Know and Need to Know

Although a great deal of attention has been paid to IMF conditionality and to the effects of IMF programmes, relatively little attention has been paid to their completion rate. However, the record is that the clear majority of Fund programmes are uncompleted. Is this a cause for concern and why is it that the completion rate is low? In principle, a number of factors could be at work. Gaining a better understanding of what these are should allow policy reform at the IMF to improve performance. While there are things that we do not know and need to know about programme completion, we know enough to delineate the broad direction that policy should take.     

India's Trade Policy Reforms and Industry Competitiveness in the 1980s

The paper proposes a method of measuring and analyzing competitiveness, and applies it to Indian manufacturing data of 1980/81, 1987/88 and 1991/92. The method consists of computing a unit cost ration and breaking it down into various components, ditinguishing between comparative advantage measured at shadow prices, and competitive advantage measured at market prices. The difference, equal to the sum of all price ditortions, may enhance or diminish competitiveness, depending on whether the distortions are cost‐increasing or ‐decreasing. The study reviews first the limited trade reforms of the 1980s and examines whether they have led to increased competitiveness. Although the present study is limited to less than the full potential of the method, due to lack of adequate data, it demonstrates, that the policy changes of the 1980s have failed to enhance the competitiveness of the industrial sector as a whole, while some industries have undergone substantive changes. In three industry case studies the results are compared with the findings of earlir studies.