Abstract
‘Poor States, Power, and the Politics of IMF Reform: Drivers of Change in the Post-Washington Consensus’ by Mark Hibben addresses a critical gap in the International Monetary Fund (IMF) literature. Chapter 1 highlights that despite the growing policy footprint of the IMF in the world’s poorest states, the literature has not elucidated what factors drive successful cases of IMF Low Income Developing Country (LIDC) reform in the post-Washington Consensus period. The chapter provides a brief overview of LIDCs and develops why the post-2008 period is crucial for policy insiders and activists interested in macroeconomic and development outcomes in the global South. The chapter then introduces the four cases studied and the book’s research design. It concludes with a summary of major findings.
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Notes
- 1.
1. Data compiled from the 2005 and 2014 IMF annual reports. For the 2005 Annual Report, see IMF (2005) Annual Report of the Executive Board for the Financial Year Ended April 30, 2005, Appendix II, page 12, http://www.imf.org/external/pubs/ft/ar/2005/eng/index.htm, date accessed 11 June 2015. For the 2014 Annual Report, see IMF (2014) Annual Report of the Executive Board for the Financial Year Ended April 30, 2014, Appendix II, page 1, http://www.imf.org/external/pubs/ft/ar/2014/eng/index.htm, date accessed 11 June 2015.
- 2.
2. At the 2009 G-20 summit, member states requested that the IMF coordinate the so-called Mutual Assessment Process (MAP). The MAP is designed to ‘identify objectives for the global economy, the policies needed to reach them, and the progress toward meeting these shared objectives’. Since 2009, the Fund has presented an annual MAP report at the G-20 meetings. See IMF Official Website, IMF Factsheet: The G-20 Mutual Assessment Process (MAP), http://www.imf.org/external/np/exr/facts/g20map.htm, date accessed 7 October 2014.
- 3.
3. Prior to 2014, the Fund used ‘low income countries’ to describe its poorest states. In 2014, the World Economic Outlook adopted the term ‘low income developing countries’. The two are currently used interchangeably within the IMF. See IMF Official Website, Proposed New Grouping in WEO Country Classifications: Low Income Developing Countries, http://imf.org/external/np/pp/eng/2014/05=60314.pdf, date accessed 2 January 2015.
- 4.
4. For an overview of LIDC programs at the IMF, and how these have moved to the ‘front and center’ in the IMF’s agenda, see the recently launched Fund website focused on its poorest member states at http://www.imf.org/external/np/exr/key/lic.htm
- 5.
5. This project thus consciously selects on the dependent variable the dependent variable (LIDC policy change). As outlined by George and Bennett (2005: 23–4), doing so is appropriate in early stages of research focused on identifying potential variables and mechanisms that impact the dependent variable in question: ‘Cases selected on the dependent variable … can help identify which variables are not necessary or sufficient conditions for the selected outcome. In addition, in the early stages of a research program, selection on the dependent variable can serve the heuristic purpose of identifying the potential causal paths and variables leading to the dependent variable of interest. Later, the resulting causal model can be tested against cases in which there is variation in the dependent variable’.
- 6.
6. The success of these efforts led to further calls for debt reduction. In 2005, the G-8 proposed that the IMF, World Bank, and African Development Fund cancel 100 % of multilateral debt claims of states that had reached HIPC II completion points. Under the Multilateral Debt Relief Initiative (MDRI), the Fund formed two trusts (MDRI-I and MDRI-II) to pay off the full stock of debt owed to the IMF for loans disbursed prior to 2005.
- 7.
7. John Williamson, an economist at the Peterson Institute in Washington, DC, coined the term ‘Washington Consensus’ in 1989. In its original context, the Washington Consensus was a description of what Williamson saw as the broad-based consensus among ‘the political Washington of Congress and senior members of the administration and the technocratic Washington of the international financial institutions, the economic agencies of the U.S. government, the Federal Reserve Board, and the think tanks around appropriate reforms needed in Latin American economies at the time’. Williamson argues that the popular use of the term that emerged in the 1990s equated it with market fundamentalism and misrepresented his original meaning. He maintains, for example, that his conception of the Washington Consensus did not support carte blanche deregulation and privatization. Williamson (2008: 14–30) also notes that he was staunchly opposed to capital account liberalization pushed by the IMF until the late 1990s.
- 8.
8. The term ‘post-Washington Consensus’ was first used by Joseph Stiglitz in a 1998 speech outlining his critique of the ‘market fundamentalism’ of the Washington Consensus. At the time, Stiglitz was vice president and chief economist of the World Bank. See Stiglitz (1998).
- 9.
9. Finance and Development is the quarterly publication of the IMF and is self-described as ‘publishing analysis of issues related to the international financial system, monetary policy, economic development, poverty reduction, and other world economic issues’.
- 10.
10. As outlined by Rupert (2000: 42), social relations, while not empirically ‘observable’ as things, have structures that can be explained through an analysis of ‘identifiable constellations of dominant social forces’ in prevailing historical structures.
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Hibben, M. (2016). The IMF, LIDC Reform, and the Post-Washington Consensus. In: Poor States, Power and the Politics of IMF Reform. International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-57750-4_1
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