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Challenges to the World Bank and IMF

Challenges to the World Bank and IMF

Ariel Buira | Dani Rodrik

(2003)

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Book Details

Abstract

Bringing together some of the foremost authorities in their fields, this book is the result of work carried out on behalf of the G24, the world's only research effort devoting to furthering the interests of developing countries and bringing their needs to global attention. The book gives a voice to the developing nations of the world through its powerful essays and its fresh perspective.


This challenging and unique new volume examines some of the most burning issues on the economic agenda in the world today. Bringing together some of the foremost authorities in their fields, this book is the result of work carried out on behalf of the G24, the world's only research effort devoting to furthering the interests of developing countries and bringing their needs to global attention. The book gives a voice to the developing nations of the world through its powerful essays and its fresh perspective. Challenging the existing mechanisms for the governance of the world economy, the chapters in this book consider the current approaches of the World Bank and IMF, and the operations of financial markets, and offer alternative proposals for the effective participation of developing countries. In doing so, the volume ranges from discussions on reforming the IMF and its conditionality, debt workouts and restructuring, through management of capital flows, debt sustainability and insurance against crisis, to Millennium Development Goals and the 'global partnership development'.


'Nowhere is the voice of the developing nations expressed as cogently and powerfully as in these fresh and controversial essays.' —Dani Rodrik, Professor of International Political Economy, John F. Kennedy School of Government, Harvard University


Ariel Buira is Director of the G24 Secretariat. He has been Special Envoy of the President of Mexico for the UN Conference on Financing for Development, Ambassador of Mexico, Member of the Board of Governors of the Bank of Mexico and Executive Director of the IMF.


'This is a very refreshing and thorough critique of today's development orthodoxy represented by the World Bank and the IMF. The combination of iconoclastic perspectives and detailed knowledge of the subject matter makes it particularly powerful.' —Ha-Joon Chang, Director of Development Studies, University of Cambridge


'Incisive and powerful… "Challenges to the World Bank and IMF" is a unique book, providing the reader with a collection of highly professional papers from the perspective of developing countries, covering their economic problems and their relations with International Financial Institutions.' —Claudio M. Loser, Inter-American Dialogue


Table of Contents

Section Title Page Action Price
Front Matter i
Half Title i
Advance Reviews ii
Title iii
Copyright iv
Table of Contents v
List of Contributors vii
Foreword ix
Main Matter 1
Introduction, by Ariel Buira 1
1. Governance and key policy issues 6
2. Managing capital movements and preventing crises 8
3. Millennium Development Goals and the provision of global public goods 9
Notes 10
Chapter 1: The Governance of the IMF in a Global Economy, by Ariel Buira 13
Abstract 13
1. Introduction 13
2. Votes and decision-making 14
3. Consensus and qualified majorities 17
4. Review of quota formulas 19
5. The size of the IMF 21
6. On reforming the governance of the IMF 22
7. Concluding remarks 27
Appendix: Executive Directors and Voting Power 28
Notes 35
Bibliography 35
Chapter 2: Who Pays for the IMF? by Aziz Ali Mohammed 37
Abstract 37
1. Introduction 37
2. Cost of IMF lending through the General Resources Account (GRA) 38
3. The burden-sharing mechanism 39
4. Additional creditor contributions to burden-sharing 41
5. Rising cost of running the IMF 43
6. Gold and the GRA 44
7. Other proposals for improving burden-sharing in the GRA 46
8. Concessionary lending 47
9. Summary and conclusions? 49
Notes 51
Bibliography 53
Chapter 3: An Analysis of IMF Conditionality, by Ariel Buira 55
Abstract 55
1. Introduction 56
2. Some unresolved questions on conditionality 57
3. The nature and purposes of conditionality 58
4. The rise and fall of structural conditionality 61
5. Does conditionality safeguard Fund resources? 63
6. The new guidelines on conditionality 67
7. Adjustment and financing: a shifting balance 70
8. Excess demand and structural imbalances 74
9. Capital-account crises 76
10. Conclusion 78
Appendix I: The Origins of Conditionality 82
Appendix II: The Rise of Structural Conditionality 86
Notes 87
Bibliography 89
Chapter 4: Achieving Long-Term Debt Sustainability in Heavily Indebted Poor Countries (HIPCs), by Bernhard G Gunter 91
Abstract 91
1. Introduction 92
2. Background 93
3. Key Problems of the Enhanced HIPC Initiative 95
4. Suggested changes in the HIPC Initiative framework 99
5. Key issues related to a new aid architecture 103
6. Necessary structural changes 106
7. Conclusion 113
Notes 114
Bibliography 115
Chapter 5: The Poverty Reduction Strategy Paper Approach: Good Marketing or Good Policy? by Jim Levinsohn 119
Abstract 119
1. Introduction 119
2. The PRSP process 121
3. Conclusion 132
Notes 138
Bibliography 139
Chapter 6: Capital Management Techniques in Developing Countries, by Gerald Epstein, Ilene Grabel and KS Jomo 141
Abstract 141
1. Introduction 141
2. Case studies 143
3. Lessons and opportunities for capital management in developing countries 163
Notes 170
Bibliography 172
Chapter 7: International Reserves to Short-Term External Debt as an Indicator of External Vulnerability: The Experience of Mexico and Other Emerging Economies, by Javier Guzman Calafell and Rodolfo Padilla del Bosque 175
Abstract 175
1. Introduction 176
2. Background 177
3. IMF methodology for calculating the appropriate vulnerability indicator 178
4. Estimating the vulnerability indicator for a sample of countries 179
5. Estimating the vulnerability indicator for Mexico 193
6. Concluding remarks 198
Notes 200
Bibliography 201
Chapter 8: Mechanisms for Dialogue and Debt-Crisis Workout that can Strengthen Sovereign Lending to Developing Countries, by Barry Herman 203
Abstract 203
1. Introduction 204
2. The value of a continuous conversation on crisis prevention 205
3. Policy in the event of sovereign default 208
4. Conclusion: more work needed on debt restructuring 220
Notes 221
Bibliography 225
Chapter 9: Developing a Global Partnership for Development, by Martin Khor 227
Abstract 227
1. Introduction 227
2. Integrating developing countries in the world economy 229
3. Trade, development, and reform of the multilateral trading system 231
4. Conclusions 238
Appendix 1: Millennium Development Goals (MDGS) 244
Notes 249
Bibliography 250
Chapter 10: International Financial Institutions and International Public Goods: Operational Implications for the World Bank, by Ravi Kanbur 251
Abstract 251
1. Introduction 251
2. IPG theory 252
3. World Bank Practice 256
4. Reform to promote IPGs 261
5. Conclusion 263
Notes 265
Bibliography 265
Index 267