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The IMF and the World Bank at Sixty


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Reviews the position of the IMF and World Bank in their sixtieth year.

'The IMF and the World Bank at Sixty' presents a selection of essays prepared for the Group of Twenty-Four Developing Nations (G24), by some of the foremost authorities in their fields, which address these challenges and suggest the need for reform in several areas. These essays have one fundamental aim: to improve the functioning of the global economy and to better enable developing countries to share in the prosperity of recent decades.

List of Contributors; Foreword; 1. Introduction; 2. The IMF at Sixty: An Unfulfilled Potential?; 3. Conditionality and Its Alternatives; 4. Mission Creep, Mission Push and Discretion: The Case of IMF Conditionality; 5. Up From Sin: A Portfolio Approach to Salvation; 6. Trip Wires and Speed Bumps: Managing Financial Risks and Reducing the Potential for Financial Crises in Developing Economies; 7. A Fiscal Insurance Scheme for the Eastern Caribbean Currency Union; 8. Who Pays fot the World Bank?; 9. Reinventing Industrial Strategy: The Role of Government Policy in Building Industrial Competitiveness; 10. Assessing the Risks in the Private Provision of Essential Services; 11. How Well Do Measurements of an Enabling Domestic Environment for Development Stand Up?; 12. The Cocoa Market Under Neoliberalism; Index



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Published 05 May 2005
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EAN13 9780857287281
Language English
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The IMF and the World Bank at Sixty
Advance Reviews
‘If the Bretton Woods Institutions did not exist, they would have to be invented – or so many experts would have us believe. However, the real question is, would they be designed differently? The contributors to this volume provide cogent arguments for substantial reforms, not only to the IMF and World Bank, but to the entire financial system, to make it less prone to crisis and more supportive to developing countries.’ Roy Culpeper, Ph.D. President and CEO, The NorthSouth Institute, Canada
‘This book combines a wellinformed critique of IMF and World Bank activities by spokespeople for a group of developing countries, with proposals to improve the sit uation. It contains a valuable critique of the current powerbased international mon etary system, the unrepresentative governance system of the IMF and World Bank, the IMF's mission creep, and existing indices of policy and institutional quality. It also contains proposals to reduce the risk of developing country financial crises, apply industrial policy, increase world cocoa prices, and introduce fiscal insurance in the Eastern Caribbean. It should have an impact on global policy discussion. It will sup ply ammunition to all those sceptical about the benefits to developing countries of current global economic policies and institutions. It will also be useful reading for courses on global governance, development economics, and international finance.’ Professor Michael J Ellman Department Chair, Economics, Faculty of Economics and Econometrics, Universiteit van Amsterdam
‘More than ever the International Financial Institutions like World Bank and IMF are in need of the creative and well documented thinking of developing countries. In this book, Ariel Buira and his group of coauthors provide such thinking, based on their work for the G24, the powerful group of upcoming nations (today devel oping, tomorrow the world leaders, like India and Brazil). These “voices of the poorer” are excellent challenges and extensions of present development thinking, whether they are concerned with debt management in developing countries, with conditionalities of the IMF or (my favourite) industrial competitiveness.’ Jozef Ritzen President of the Universiteit Maastricht and former Vice President of the World Bank’s Development Economics Department (2001–3)
‘The current volume is indicative of the range of significant second opinions, reflective of developing countries’ concerns, that emanate from the G24’s con tinuing research programme. Its papers should stimulate debates that, on the occasion of the IFIs’ 60th anniversary, deserve to take place both within these institutions and throughout the broader community of financial and development analysts and policymakers.’ Gerry Helleiner Professor Emeritus, Economics and distinguished Research Fellow, Munk Centre for International Studies, University of Toronto
The IMF and the World Bank at Sixty
Edited by A R IE L BU IR A for the G24 Research Programme
Anthem Press
Anthem Press An imprint of Wimbledon Publishing Company www.anthempress.com
This edition first published in UK and USA 2005 by ANTHEM PRESS 75–76 Blackfriars Road, London SE1 8HA, UK or PO Box 9779, London SW19 7ZG, UK and 244 Madison Ave. #116, New York, NY 10016, USA
© 2005 Ariel Buira editorial matter and selection; individual chapters © individual contributors.
The moral right of the authors has been asserted.
All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.
British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library.
Library of Congress Cataloging in Publication Data A catalog record for this book has been requested.
1 3 5 7 9 10 8 6 4 2
ISBN 978 1 84331 196 6 (Pbk)
List of Contributors Foreword 1 Introduction Ariel Buira 2 The IMF at Sixty: An Unfulfilled Potential? Ariel Buira 3 Conditionality and Its Alternatives Devesh Kapur 4 Mission Creep, Mission Push and Discretion: The Case of IMF Conditionality Sarah Babb and Ariel Buira 5 Up From Sin: A Portfolio Approach to Salvation Randall Dodd and Shari Spiegel 6 Trip Wires and Speed Bumps: Managing Financial Risks and Reducing the Potential for Financial Crises in Developing Economies Ilene Grabel 7 A Fiscal Insurance Scheme for the Eastern Caribbean Currency Union Laura dos Reis 8 Who Pays for the World Bank? Aziz Ali Mohammed 9 Reinventing Industrial Strategy: The Role of Government Policy in Building Industrial Competitiveness Sanjaya Lall 10 Assessing the Risks in the Private Provision of Essential Services Tim Kessler 11 How Well Do Measurements of an Enabling Domestic Environment for Development Stand Up? Barry Herman 12 The Cocoa Market Under Neoliberalism Irfan ul Haque Index
vii xi 1
The G24 The Intergovernmental Group of 24 for Intentional Monetary Affairs and Development was constituted in 1972 as a result of a mandate given in Lima by the Group of 77 to their Chairman, to consult member governments on the establishment of an intergovernmental group on monetary issues. Its members, nine African, eight Latin American and seven Asian countries are as follows: Algeria, Argentina, Brazil, Colombia, Côte d’Ivoire, Democratic Republic of Congo, Egypt, Ethiopia, Gabon, Ghana, Guatemala, India, Iran, Lebanon, Mexico, Nigeria, Pakistan, Peru, Philippines, South Africa, Sri Lanka, Syrian Arab Republic, Trinidad and Tobago, and Venezuela.
The purpose of the G24 is to further the interests of the developing coun tries and their effective participation in the discussions of monetary, financial and development issues at the Bretton Woods institutions and other fora. It seeks to provide technical support to its members and to the G77 in their con sideration of these issues. To this effect, the G24 Secretariat, supported by its members and other sources, runs a research programme in which academics and other researchers from countries in the North and South address the main issues of concern to the developing world in their areas of competence. To ensure intellectual freedom in their work, the results of their research and the views expressed in the papers presented to the G24 are the sole responsi bility of the authors.
Sarah Babbis Assistant Professor of Sociology at Boston College. She is author and coauthor of a number of articles in political and economic sociology, as well as ‘Managing Mexico: Economists from Nationalism to Neoliberalism’, which traces the history and social structure of the Mexican economics profession over the course of the 20th century. Ariel Buira, Editor, is Director of the G24 Secretariat. He has been Special Envoy of the President of Mexico for the UN Conference on Financing for Development, Ambassador of Mexico, Senior Associate Member of St. Anthony’s College, Oxford, Member of the Board of Governors of the Bank of Mexico, Staff member and Executive Director of the IMF. He is author of numerous articles on macroeconomics and international eco nomics. He editedChallenges to the World Bank and IMF(Anthem Press, 2003). Randall Doddthe Financial Policy Forum inis the founder and director of Washington, D.C. He previously worked as an economist for the Commodity Futures Trading Commission and the U.S Congress. He received his Ph.D. in economics from Columbia University where he specialized in interna tional trade and finance. Ilene GrabelInternational Finance at the, Ph.D., is Associate Professor of Graduate School of International Studies of the University of Denver. She is the coauthor (with Professor HaJoon Chang) ofReclaiming Development: An Alternative Economic Policy Manual(Zed Books, 2004). She has written widely on financial crisis and reform in the developing world. Irfan ul Haqueholds a B.A. and M.A. in Economics from the University of Panjab, and a B.A., M.A. and Ph.D. in Economics from the University of Cambridge. He worked for UNCTAD 1967–69 and for the World Bank 1970–97. He also served at the South Centre, Geneva, during 1998–99. He has written a number of publications on issues of trade, finance and development. Barry Hermanis a Senior Advisor in the Financing for Development Office in the United Nations Department of Economic and Social Affairs, New York. He was part of the Secretariat that prepared the Monterrey UN Conference on Financing for Development in 2002. Earlier, he led the
team that produced the UN’s annualWorld Economic and Social Survey. He has edited three books and published articles and chapters in books on North South financial issues. Devesh Kapuris the Frederick Danziger Associate Professor of Government at Harvard University. He is a faculty associate at the Weatherhead Center for International Affairs and the Center for International Development at Harvard University, a senior associate of the Global Economic Governance Programme at the University of Oxford and a NonResident Fellow at the Center for Global Development in Washington, D.C. Tim Kessler, an independent consultant, wrote the present contribution when he served as Director of Research for the Network on Essential Services. He has also worked as a social science consultant at the World Bank, where he helped develop tools for social and institutional analysis used to conductex antestructural adjustmentevaluations of the impact of programs. Kessler has a doctorate in political science from the University of California, Berkeley. Sanjaya Lall, educated in India and Oxford, is Professor of Development Economics at the Department of International Development at Oxford University. He has also been a staff member of the World Bank for several years and consultant to various international organizations and govern ments on technology, foreign direct investment and competitiveness. He is chief editor ofOxford Development Studies. Aziz Ali Mohammedis Advisor to Executive Director at the IMF, and G24 Deputy for Pakistan. He served on IMF staff from 1961 to 1990, his last position being Head of the External Relations Department. He served as Alternate Executive Director representing the Middle East constituency on the IMF Executive Board from 1991 to 1992. He has coauthored two books on Pakistan and contributed to several academic journals. Laura dos Reisis Research Associate at the G24 Secretariat in Washington, D.C. She has been a consultant for the World Bank (2002) and the Research department of the InterAmerican Development Bank (1999–2001) on issues related to macroeconomics and international finance. She previously worked as an analyst for the Ministry of Economics in Argentina (1995–97). She holds an M.A. in International Development from the Kennedy School of Government at Harvard University and an M.A. in Economics from Di Tella University, Argentina. Shari Spiegelis Managing Director of Initiative for Policy Dialogue. Previously, she was a Director of Lazard Asset Management LLC. Ms Spiegel was one of the founders and CEO of Budapest Investment Management Company. She worked at Citibank and Drexel Burnham Lambert in fixed
income research, crosscurrency interestrateswap trading, and credit research. Ms Spiegel has an M.A. in economics from Princeton University and a B.A. in applied mathematics and economics from Northwestern University. She is an Adjunct Associate Professor at Columbia University’s School of International and Public Affairs.