IGS 10a Chapter Notes - Chapter LATTE: World Trade Organization, Conditionality, Emerging Markets
2 Sep 2016
School
Department
Course
Professor
Randall Stone, How to Reform the IMF
● World’s essentially liberal international institutions, participatory but US-led, expanded
after end of Cold War
● Now forced to adapt to dramatic economic growth in Asia and Latin America
● US influence notable in IMF and World Bank now under heavy challenge
● Multilateral and intergovernmental structures have expanded rapidly since the end of the
Cold War
● Most important international economic org - IMF, World Bank, WTO, and EU - have
reinvented themselves multiple times and international law has increased in scope and
efficiency
○ In general, international governance broader, deeper, and more comprehensive
with signs of more improvement
● International org lend legitimacy and credibility to cooperative undertakings yet this can
be impeded
○ Must build trust by avoiding powerful states breaking rules in their interest
Informal Privilege
● Particularly true of US
○ US developed in formal channels to allow it to exert decisive influence when
national interests affected
○ US accepts weaker formal rights than share of world economy
would predict → informal governance
● Informal governance satisfies distribution of power but leading state must exercise self-
restraint to make sure policies are tolerably close to those of other states
● When geopolitical or domestic consideration outweighs long-term interests in promoting
cooperation, US tends to abuse privileges
○ Undermines credibility and legitimacy of international orgs
● Consequence: declining participation of other states in international orgs
● As resources of market economies expand, calls to reform international financial
institutions intensified
○ More transparent and accommodating to developing countries
The Redistribution of Risk
● IMF come to symbolize efforts of advanced industrial countries to link financial
assistance they provide to developing countries with broad agenda of macroeconomic
policy adjustment, trade and financial liberalization, and structural reform
● Not always so
○ Both liberal and illiberal initially envisioned
○ Conditionality not attached to loans at first (US)
○ Process 1950s-1990s and on
The Rush to Self-Insure
● IMF policy more demanding and developing countries forced to
liberalize markets → size of IMF loans decreased relative to private
capital flows
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
World"s essentially liberal international institutions, participatory but us-led, expanded after end of cold war. Now forced to adapt to dramatic economic growth in asia and latin america. Us influence notable in imf and world bank now under heavy challenge. Multilateral and intergovernmental structures have expanded rapidly since the end of the. Most important international economic org - imf, world bank, wto, and eu - have reinvented themselves multiple times and international law has increased in scope and efficiency. In general, international governance broader, deeper, and more comprehensive with signs of more improvement. International org lend legitimacy and credibility to cooperative undertakings yet this can be impeded. Must build trust by avoiding powerful states breaking rules in their interest. Us developed in formal channels to allow it to exert decisive influence when national interests affected. Us accepts weaker formal rights than share of world economy would predict informal governance.
