The politics of IMF–EU cooperation : institutional change from the Maastricht Treaty to the launch of the Euro

How do regional changes affect the process of global governance? This article addresses this question by examining how the International Monetary Fund (IMF) responded to the challenges presented by Economic and Monetary Union (EMU) between the signing of the Maastricht Treaty in 1992 and the launch of the euro in 1999. Based on primary research from the IMF archives, the article illustrates how the IMF's efforts to reconfigure its relationship with European institutions evolved gradually through a logic of incremental change, despite initial opposition from member states. The article concludes that bureaucratic actors within international organizations will take advantage of informal avenues for promoting a new agenda when this fits with shared conceptions of an organization's mandate. The exercise of informal influence by advocates for change within an international organization can limit the options available to states in formal decision-making processes, even when these options cut across state preferences

Tax administration in developing countries : strategies and tools of implementation

Developing nations should adopt less sophisticated taxes (such as taxes on goods and services) to broaden the tax base and use more efficient administrative techniques. This could be achieved through a system of income withholdings (for all components of income) and through computerization. This could simplify withholding and collection by giving each taxpayer a number in a master file. Computers could also facilitate information gathering, cross checking, and audits. At present, potential tax bases are often not exploited because the application of existing laws is not possible. Because of this, administrators face major problems: a large portion of the economy is at a subsistence level and does not keep records. Where records are kept, accounting is not reliable. Taxpayer cooperation is also low for a variety of reasons: shortage of trained officials, a tradition of corruption, and because taxes are not often seen to produce better government services.Public Sector Economics&Finance,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Tax Policy and Administration

The new resilience of emerging and developing countries: systemic interlocking, currency swaps and geoeconomics

The vulnerability/resilience nexus that defined the interaction between advanced and developing economies in the post-WWII era is undergoing a fundamental transformation. Yet, most of the debate in the current literature is focusing on the structural constraints faced by the Emerging and Developing Countries (EDCs) and the lack of changes in the formal structures of global economic governance. This paper challenges this literature and its conclusions by focusing on the new conditions of systemic interlocking between advanced and emerging economies, and by analysing how large EDCs have built and are strengthening their economic resilience. We find that a significant redistribution of ‘policy space’ between advanced and emerging economies have taken place in the global economy. We also find that a number of seemingly technical currency swap agreements among EDCs have set in motion changes in the very structure of global trade and finance. These developments do not signify the end of EDCs’ vulnerability towards advanced economies. They signify however that the economic and geoeconomic implications of this vulnerability have changed in ways that constrain the options available to advanced economies and pose new challenges for the post-WWII economic order

Toward the Development of a Global Financial Safety Net or a Segmentation of the Global Financial Architecture?

This article examines the prospects for the development of a comprehensive global financial safety net (GFSN). It discusses the optimal layout of the GFSN, comprising the International Monetary Fund, regional financing arrangements (RFAs), as well as bilateral or multilateral central bank swap arrangements, and the relationship between these. It then briefly reviews and appraises the current structure and functioning of these different layers of the GFSN and discusses the need and scope for strengthening cooperation between RFAs and the IMF. It argues that the GFSN is still very patchy and there is little reason to expect significant progress in better collaboration between RFAs and the IMF as long as the latter’s governance structure is not significantly revamped. Indeed, risks are that the GFSN will become even more fragmented with the further development of the European Stability Mechanism and the emergence of the BRICS Contingent Reserve Arrangement. To prevent a further fragmentation of the GFSN, substantial governance reform of the IMF is urgently needed

Livelihood diversification and the expansion of artisanal mining in rural Tanzania: drivers and policy implications

This paper provides an extended analysis of livelihood diversification in rural Tanzania, with special emphasis on artisanal and small-scale mining (ASM). Over the past decade, this sector of industry, which is labour-intensive and comprises an array of rudimentary and semi-mechanized operations, has become an indispensable economic activity throughout Sub-Saharan Africa, providing employment to a host of redundant public sector workers, retrenched large-scale mine labourers and poor farmers. In many of the region’s rural areas, it is overtaking subsistence agriculture as the primary industry. Such a pattern appears to be unfolding within the Morogoro and Mbeya regions of southern Tanzania, where findings from recent research suggest that a growing number of smallholder farmers are turning to ASM for employment and financial support. It is imperative that national rural development programmes take this trend into account and provide support to these people

World Commodity Prices and Domestic Retail Food Price Inflation: Some Insights from the UK.

We address the links between world commodity prices and retail food price inflation, focussing on two aspects. First, since world commodity prices represent a relatively small share of costs of retail food products, retail price behaviour may differ from world commodity prices and other factors (exchange rates and other input costs) will also matter in determining retail food inflation. Second, noting that the world price spike of 2007-2008 was different in the level and duration from the price spike experienced in 2011, we also emphasise an obvious but neglected fact that the effect on retail food price inflation depends on the duration of the shocks on world commodity markets, not just the magnitude of price spikes (the latter often commanding most attention). Being an open economy reliant on world commodity trade, the UK offers a natural and hitherto unexplored setting for the analysis. Applying time series methods to a sample of 259 monthly observations over the 1990(9)-2012(3) period we find substantial and significant long term partial elasticities for domestic food price inflation with respect to world food commodity prices, the exchange rate and oil prices (the latter indirectly via a relationship with world food commodity prices). Domestic demand pressures and food chain costs are found to be less substantial and significant over our data period. Interactions between the main driving variables in the system tend to moderate rather than exacerbate these partial effects. Furthermore, the persistence of shocks to these variables markedly affects their effects on domestic food prices

Back to basics : the Great Recession and the narrowing of IMF policy advice

This article contributes to the literature on the dynamics of change and continuity in the International Monetary Fund's (IMF's) policy paradigm. The IMF embarked on a process of “streamlining conditionality” during the 2000s, but many observers have argued that the IMF's policy paradigm from the 1990s remains intact. This article examines whether the scope of the IMF's policy advice to borrowers during the Great Recession narrowed in comparison to its advice to borrowers during the heyday of the Washington consensus in the 1980s and 1990s. The article uses qualitative content analysis to establish the frequency of a series of policy dialogue indicators in four sample sets of countries requesting IMF stand-by arrangements over three decades. The evidence suggests that contemporary IMF policy advice to borrowers continues to stress the importance of fiscal consolidation, with reduced emphasis on promoting the structural economic reforms associated with the Washington consensus era

The politics of Chinese trade and the Asian financial crises : questioning the wisdom of export-led growth

Between 1987 and 1996 Chinese exports increased by an average of 14% each year. During this decade, export growth became a crucial determinant of overall economic growth. However, as a consequence of the East Asian financial crises, Chinese export growth slowed, threatening the successful implementation of plans to restructure the domestic Chinese economy. This paper traces the reasons for the rapid growth and subsequent slowing of Chinese exports, and asks whether the strategy provides a solid basis for the long term development of the Chinese economy. In particular, the paper focuses on the role and significance of the processing trade in boosting Chinese exports. The high proportion of imported components in processed exports questions whether China is really benefiting as much from export growth as aggregate trade figures seem to suggest

How to sustain entrepreneurial performance during the current financial crisis

In a debt-ridden society that badly needs to grow economically, policies controlling the flows of economic accounts (revenues and expenditures) should be consistent with an efficient “asset and liability management”. The extra money obtained from immediate sales of idle or low-productive government properties can boost economic growth if lent to innovative entrepreneurial firms

Uncertain fiscal consolidations

The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition are uncertain. Drawing on the evidence in Alesina and Ardagna (2010), we emphasize whether or not the fiscal consolidation is driven by tax rises or expenditure cuts. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary and/or successful in stabilizing government debt