Bi-Polar Disorder: Exchange Rate Regimes, Economic Crises and the IMF

Over the course of the 1990s economists appeared to favour exchange rate regimes that were either completely flexible or rigidly fixed through mechanisms such as currency boards. According to this "bipolar" view of exchange rates, intermediate regimes were deemed to be ineffective and prone to crisis. This paper examines the link between exchange rate regimes and International Monetary Fund (IMF) programme use and finds fairly strong evidence that countries with intermediate exchange rate regimes are less likely to go to the IMF than others. To the extent that International Monetary Fund (IMF) programmes are a proxy for balance of payments difficulties, this finding supports the more recent, nuanced, literature on exchange rate regime choice.

Should It Be Curtains for Some of the IMF’s Lending Windows?

Increasing attention is being paid to IMF governance, and the structure and size of the Fund’s lending operations. However, less interest has been shown in the array of lending windows through which the IMF makes resources available. There have nonetheless been clear trends over recent years in the extent to which the windows are used. What discussion has occurred has been largely qualitative. In this paper, and as far as the data allow, we adopt a quantitative approach and focus on the extent to which the economic circumstances in which countries sign extended and concessionary arrangements differ from those in which they sign conventional stand bys. On this basis, we claim that there is a strong case for discontinuing the EFF but for continuing the PRGF. The paper also discusses, more broadly, reforms to the structure of the IMF’s lending windows.

Explaining IMF Arrangements: Was Asia Different?

Claims have been made that capital account crisis (CAC) countries are discernibly different in terms of the characteristics that lead them to borrow from the IMF. This paper tests these claims. It uses a conventional model of IMF lending to estimate the probability of countries having an IMF arrangement on the basis of key economic circumstances. In particular it examines countries that have been identified by the Fund as capital account crisis countries but it also looks at a number of comparator countries. The findings suggest that there are some regional differences between CAC countries, but also differences within regions. Broadly speaking the findings confirm that Asian economies around the time of the 1997/98 crisis tended to turn to the IMF for financial support more quickly than would have been anticipated.

The IMF's Role in Mobilizing Private Capital Flows: Are There Grounds for Catalytic Conversion?

Recent theoretical and empirical research suggests that under certain conditions IMF agreements induce additional inflows of finance from other private sources. This paper provides new empirical evidence on this catalytic effect using a treatment effects model to correct for selectivity. It concludes that catalysis remains weak or negative overall, with nuances that support recent theory.IMF, catalysis, international capital flows

The Analysis of Catalysis: IMF Programs and Private Capital Flows

This paper examines the claim that the IMF catalyzes other capital flows. We identify a series of propositions based on recent theoretical work, use a treatment effects model to deal with selection bias, and examine whether the IMF catalyzes both aggregate private financial flows and important subgroups for middle-income countries. The results presented here support many of the propositions, but also indicate that the sign and significance of catalysis varies according to the type of flow and the circumstances of the country. The finding that catalysis is complex and nuanced has important implications for policy that are briefly discussed.IMF, catalysis, international capital flows, private capital flows

IMF Quotas; Constructing An International Organization Using Inferior Building Blocks

The International Monetary Fund’s structure and rules are based on the quota system that was constructed when the Fund was set up in 1946. Quotas affect contributions and resource availability at the Fund, access to resources, the distribution of Special Drawing Rights, and voting rights. Despite periodic reviews and modifications, the quota system has gradually been eroded and undermined. The fundamental problem is that a single system is attempting to serve four separate and incompatible functions. We illustrate how this erosion has taken place, and how an unreformed quota system will compromise the future operations of the IMF and the international monetary and financial system. Although the difficulties associated with reforming quotas are myriad and complex, the legacy of an unreformed quota system may be profoundly undesirable. We argue that a refined IMF structure must accommodate a clearer separation of a member’s contributions to the IMF, its access to IMF resources, and its voting rights at the institution.

Emerging donors in international development assistance : a synthesis report

This paper reviews the lessons revealed by the country studies of Brazil, China, India, and South Africa, who are referred to collectively as ‘emerging donors’. The studies emphasize the origins, structure, and operations of these countries’ development assistance programs—especially the research for development and international collaborative dimensions of their programs

Budget Restraint and Military Expenditures in NATO Countries: A Review of the Literature

The broad purpose of this report is to review the academic and scientific literature on the factors affecting the quantity and quality of expenditures on defence by members of a military alliance. The motivation for the study is the expectation that countries in the North Atlantic Treaty Organization (NATO) will be facing budget constraints that will impinge on their contributions to collective security. In addition there has been an increasing tendency to rely on “coalitions of the willing” as the dominant organizing framework for recent military missions undertaken by several NATO members outside the European theatre. This evolving strategic environment suggests that NATO member countries may face pressures to rebalance military force structure and procurement in order to meet changing priorities. Specifically, some countries may potentially wish to alter the relative emphasis that they place on national (“private”) and alliance (“public”) military objectives. In addition, engagement in relatively more offensive missions out of the traditional NATO theatres of operation may also generate pressure to rebalance military forces accordingly. This literature review is structured in the following manner. Section 2 will examine the literature on military alliances and identity insights relevant for the current review. Section 3 will examine more specific examinations of the production and supply of military goods, while a fourth section focuses on the demand side. A concluding section will identify the key lessons that emerge from the review

Diplomazia creativa al servizio di strategie di nicchia di una piccola potenza

In the year marking the centenary since the foundation of the Azerbaijani Diplomatic Service, Baku’s foreign policy is increasingly characterised by a broader understanding of diplomacy, shaped by the gradual yet steady expansion of both areas and the tools for intervention. Guided by the attempt to develop a ‘niche strategy’ aiming at safeguarding and promoting Azerbaijani national interest, the Humanitarian Diplomacy emerges as a privileged field for Baku to adopt a pro-active and creative foreign policy. Building upon the debate around the interests behind the aid-providing activities of traditional and emerging donors, the article aims at introducing the motivations and the aims behind Azerbaijani aid policy. In particular, it aims at demonstrating that Baku’s Humanitarian Diplomacy aims chiefly at achieving immaterial benefits, having to do with international prestige and with the construction and international projection of a Good International Citizenship