Political Economy of International Lending, The (original) (raw)

Competing models of international lending activity

Journal of Development Economics, 1986

Four competing models of the World Bank's lending to developing countries are constructed and econometrically estimated by pooled time series and cross-section data. The analysis suggests that a model combining economic and political determinants performs best. Besides per capita income, inflation, balance of payment and budget deficit, external debt and past growth, politica~ determinants such as the 'capitalis¢ climate or political instability are atso important, as wel~ as a recipient country's former status as a colony or dominion. This politico-economicmodal is successfully used to forecast the distribution of IBRD loans and IDA credits among the developing countries.

Toward a Political Economy Approach to Policy-based Lending

The paper identifies a set of core concepts that reflect key "political economy" factors shaping the policy reform process that can assist in guiding the policy-based lending (PBL) design process. It discusses the recurring themes that constrain the effectiveness of PBL, reviews from a political economy perspective the PBL experience at the Asian Development Bank (ADB) and elsewhere, and identifies some outstanding conceptual issues that would have to be tackled in the future in order to increase the likelihood of effective implementation of PBLs and to strengthen the joint capacity of developing member countries (DMCs) and ADB to design more effective PBL initiatives. While the problems traditionally encountered in PBL are unlikely to be eliminated in view of the nature of policy issues and reform, their frequency and intensity may perhaps be reduced if the domestic political economy context will be given proper recognition and accommodation in the PBL design process. It is also imperative to have a longer-time perspective since policy reform involves a process of change whose time horizon is likely to extend far beyond that of a particular PBL program. 8 Perhaps with good reason: the experience with organizational change, for example in the US, a far more modest undertaking, is sobering. See for example Carr (1996) and Wilkins (1989).

International Political Economy: An Introduction to Approaches, Regimes, and Issues

A open source introductory textbook to international or global political economy. Anyone is free to download, edit/revise, and use the book. The book is is licensed under a Creative Commons Attribution (CC BY) license made possible by funding from The Saylor Foundation's Open Textbook Challenge in order to be incorporated into Saylor.org's collection of open courses available at http://www.saylor.org. Full license terms may be viewed at: http://creativecommons.org/licenses /by/3.0/legalcode

The High Politics of IMF Lending

World Politics, 1999

Analysts have long suspected that politics affects the lending patterns of the International Monetary Fund (IMF), but none have adequately specified or systematically tested competing explanations. This paper develops a political explanation of IMF lending and tests it statistically on the developing countries between 1985 and 1994. It finds that political realignment toward the United States, the largest power in the IMF, increases a country's probability of receiving an IMF loan. A country's static political alignment position has no significant impact during this period, suggesting that these processes are best modeled dynamically. An analysis of two subsamples rejects the hypothesis that the IMF has become less politicized since the end of the cold war and suggests that the influence of politics has actually increased since 1990. The behavior of multilateral organizations is still driven by the political interests of their more powerful member states.

The Political Economy of Conditional and Unconditional Foreign Assistance: Grants vs. Loan Rollovers

IMF Working Papers, 2004

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. Improving the effectiveness of financial assistance programs is a priority of international financial institutions (IFIs). This paper examines the effectiveness of alternative assistance instruments in a dynamic political economy framework. Economic policies of the receiving country are distorted by the influence of a domestic interest group. The assistance-providing IFI aims at reducing these distortions. The IFI provides assistance either as grants or loans, and either conditionally on reducing policy distortions or unconditionally. The paper shows that, other things constant, one-time grants are more effective than loan rollovers when assistance is unconditional, but that the opposite is true when assistance is conditional.

Ralph Pettman-Handbook On International Political Economy-Wo(1).pdf

More than four decades have passed since the publication of Susan Strange's germinal article "International Relations and International Economics", which launched the contemporary study of international political economy (IPE). Much progress has been made in the field in the intervening decades. We have a good understanding of the role of interests, ideas and institutions in the making of economic policy. We know the circumstances that make it more likely that states will comply with their international obligations and the reasons that some international institutions are more effective than others. An enormous literature on globalisation has aided our comprehension of this multi-faceted phenomenon and its impact on peoples' lives across the globe. Even for those most important yet most difficult questions on what makes for successful economic development and what strategies are most effective in alleviating poverty, our knowledge is much more sophisticated than it was when Susan Strange's article was published.