The case for building climate reporting into financial accounting

For mitigation efforts against climate breakdown to be effective they need to bring in the private sector in a meaningful way. Current standards for financial reporting for commercial organizations focus on the interests of capital suppliers to the exclusion of other stakeholders and civil society. These stakeholders include the suppliers of capital, trading partners, employees, regulators, tax authorities, and civil society. So far initiatives to include environmental and social costs have been additive rather than substantive. In this think piece we offer a radical proposal in the form of sustainable cost accounting (SCA). As a standard SCA would build on existing accounting principles to require commercial organizations to report on how they will manage the costs of becoming net carbon zero compliant. SCA does not include carbon pricing or the cost of offsets. It would require the commercial organization to establish the costs of the transition to carbon neutrality. Regulatory requirements, enmeshment in transnational standards, and adequate auditing would implement SCA. If SCA was mandatory and comprehensively applied it would take a significant step in bringing business onside in addressing climate breakdown

Legitimacy Gaps in the World Economy: Explaining the Sources of the IMF's Legitimacy Crisis

Since the Asian financial crisis of 1997-1998, the International Monetary Fund (the Fund) has been embroiled in an international crisis of legitimacy. Assertions of a crisis are premised on the notions that the Fund's voting system is unfair, that the Fund enforces homogeneous policies onto borrowing member states and that loan programmes tend to fail. Seen this way, poor institutional and policy design has led to a loss of legitimacy. But institutionalised inequalities or policy failure is not in itself sufficient to constitute an international crisis of legitimacy. This article provides a conceptually-driven discussion of the sources of the Fund's international crisis of legitimacy by investigating how its formal 'foreground' institutional relations with its member states have become strained, and how informal 'background' political and economic relationships are expanding in a way that the Fund will find difficult to re-legitimate. The difference between the Fund's claims to legitimacy and how its member states, especially borrowers, act has led to the creation of a 'legitimacy gap' that is difficult to close. However, identifying the sources of the Fund's international crisis of legitimacy allows us to explore what avenues are available to resolve the crisis

Pragmatic numbers: how the IMF creates policy dialogue for financial reform

Do international organizations generate benchmarks and data as tools for policy enforcement or as tools of knowledge creation? This paper suggests the latter through a case study on the power of numbers in the International Monetary Fund’s (IMF) Financial Sector Assessment Programme (FSAP). While the IMF is typically viewed as an institution that enforces global standards for economic governance through the imposition of quantitative targets (‘numbers’), we suggest that its use of benchmarking tools through the generation of financial data actually serves as knowledge creation tool for policy dialogue. As such, the IMF’s program practices differ from their policy proclamations on the need for universal standards and transparency. Seen through a pragmatist lens, as often found in economic sociology, the IMF seeks to generate ‘learning by monitoring’ with member states within its broader international political and economic constraints. This process must yield to broader principal-agent dynamics in the IMF’s governance structure, as well as tip its cap to private market actors. But it is also not hostage to them. We suggest that the IMF’s use of ‘pragmatic numbers’ within FSAPs demonstrates one method by which an institution seeks to foster learning within an environment of noise and domination

Revolving doors and linked ecologies in the world economy: policy locations and the practice of international financial reform

Are rules for the world generated by international organizations' bureaucracies or private authority? Certainly both. This paper questions the utility of a distinction between international bureaucracies and transnational private authority, and points to how actors responsible for governing the world economy move between public and private roles. To help understand this ‘revolving doors’ phenomenon we borrow from Andrew Abbott’s work on ‘linked ecologies’, in which actors within different professional ecologies form coalitions to create alliance strategies in which they can propagate the relevance of their ideas and skills. If successful, an alliance between ecologies can take control of a policy ‘location’ - how a policy problem should be legitimately understood. We examine the benefit of linked ecologies approaches through two case studies of alliances competing for the best way to solve international financial stability issues, drawing upon interviews with practitioners from key international organizations and policy networks

The politics of financial regulation expertise: international financial organizations and expert networks

This repository item contains a working paper from the Boston University Global Economic Governance Initiative. The Global Economic Governance Initiative (GEGI) is a research program of the Center for Finance, Law & Policy, the Frederick S. Pardee Center for the Study of the Longer-Range Future, and the Frederick S. Pardee School of Global Studies. It was founded in 2008 to advance policy-relevant knowledge about governance for financial stability, human development, and the environment.Who controls global policy debates on shadow banking regulation? By looking at the policy recommendations of the Bank of International Settlements, the International Monetary Fund and the Financial Stability Board, we show how experts tied to these institutions secured control over how shadow banking is treated. In so doing, these technocrats reinforced each other’s expertise and excluded some potential competitors (legal scholars), coopted others (select Fed and elite academic economists). The findings have important implications for studying the relationship between IOs technocrats and experts from other professional fields

Nonmuscle Myosin II helps regulate synaptic vesicle mobility at the Drosophila neuromuscular junction

<p>Abstract</p> <p>Background</p> <p>Although the mechanistic details of the vesicle transport process from the cell body to the nerve terminal are well described, the mechanisms underlying vesicle traffic within nerve terminal boutons is relatively unknown. The actin cytoskeleton has been implicated but exactly how actin or actin-binding proteins participate in vesicle movement is not clear.</p> <p>Results</p> <p>In the present study we have identified Nonmuscle Myosin II as a candidate molecule important for synaptic vesicle traffic within <it>Drosophila </it>larval neuromuscular boutons. Nonmuscle Myosin II was found to be localized at the <it>Drosophila </it>larval neuromuscular junction; genetics and pharmacology combined with the time-lapse imaging technique FRAP were used to reveal a contribution of Nonmuscle Myosin II to synaptic vesicle movement. FRAP analysis showed that vesicle dynamics were highly dependent on the expression level of Nonmuscle Myosin II.</p> <p>Conclusion</p> <p>Our results provide evidence that Nonmuscle Myosin II is present presynaptically, is important for synaptic vesicle mobility and suggests a role for Nonmuscle Myosin II in shuttling vesicles at the <it>Drosophila </it>neuromuscular junction. This work begins to reveal the process by which synaptic vesicles traverse within the bouton.</p

A Tax Map of Global Professional Service Firms: Where Expert Services are Located and Why

The role of multi-disciplinary Global Professional Service Firms (GPSFs) in the architecture of international tax abuse has been very little studied. Although it has been known that some of these firms operate in many of the world’s secrecy jurisdictions the scale of their activity in these, and other, locations has been little understood. Nor has their own representations of their tax services been appropriately considered. This working paper seeks to redress this deficiency. We locate the activities of these firms in the broader context of their activities around the globe, since it is the boast of many of them that they operate in more than 140 jurisdictions, worldwide. The research has revealed the opacity of the data surrounding these firms, and the unusual nature of their ownership structures. Financial reports of these firms are not available for most jurisdictions in which they work, whilst common control through ownership structures rarely crosses national boundaries. Using global directories of the firms as indication of presence in a location and the number of employees by jurisdiction as an indication of scale, our research indicates the disproportionate activity of particular GPSFs firms, namely the ‘Big Four’ accountancy firms, providing tax based services in secrecy jurisdictions. This suggests that they are major suppliers of offshore financial services. We consider the evolution of these GPSFs since the 1990s, suggesting they have been conscious participants in this activity but that their behaviour has adapted over time to reflect prevailing taxation morés to preserve the reputations of those supplying these services. As we show, these morés are reflected in their own presentation of their services as promoted on their web sites, which have changed significantly over time to reflect this fact, with little evidence that there has been any real underlying change in behaviour. As a result we suggest that these firms display a form of adaptive behaviour worthy of further study

Taming Finance by Empowering Regulators: A Survey of Policies, Politics and Possibilities

This paper examines important and desirable reforms of the international financial regulatory and taxation architecture, both from the perspective of their technical desirability and their political feasibility. The paper provides insights into how to increase the chances that desirable changes in the financial and taxation architecture will actually happen. In providing a map on the prospects of financial reform, the paper identifies the main political and technical hazards to be navigated. To do so, and pinpoint the key dangers, the paper employs Albert Hirschmann's framework for understanding negative reactions to reform agendas. We conclude by stressing that the need for reform is vital given the threat financial crises pose to development and poverty reduction

Bringing legitimacy back in to neo-Weberian state theory and international relations

Within international relations one seldom finds discussion of how legitimacy affects ‘state capacity’—a state’s capacity to enact and adapt to domestic and international change. This is especially surprising for neo- Weberian approaches that have viewed state capacity as a major concern for over two decades. And although legitimacy was a key ingredient to Max Weber’s approach to the state, the concept is eschewed or ignored in the three discernible neo Weberian approaches to state capacity. The first two of these approaches, ‘isolated autonomy’ and ‘embedded autonomy’, produce functionalist view of a state which responds to an anarchical international system. The third, ‘social embeddedness’, conceives of the state–society complex as a contested rather than functional space but does not produce a substantive conception of legitimacy. I argue that a reinvigorated conception of legitimacy provides us with a substantive neo-Weberian ‘historicist’ approach that provides a deeper understanding of how both norms and material interests shape the state. This approach is applied to a brief case study of financial reform in the United States and Japan to illustrate that bringing legitimacy back in provides a better means of understanding state capacity