WB and IMF- global economic governance

Question 1

global economic governance historically…

Answer 1

dealt with economic consequences of war in europe- creating economic stability to ensure peace

Question 2

global economic governance since decolonization…

Answer 2

addresses the socio-economic disparities between the north and south to stabilize the global economic order

Question 3

what was the bretton wood conferences’ aim?

Answer 3

to reconstruct war-torn Europe, mitigate an economic crisis like the 30s

Question 4

what was the world bank’s original name?

Answer 4

the international bank for reconstruction and development (IBRD)

Question 5

what are the world bank group AGENCIES?

Answer 5

1. international bank for reconstruction and development (IBRD)
2. international development association (IDA)
3. International finance corporation (IFC)
4. Multilateral investement guarantee agency (MIGA)
5. international centre for settlement of investement disputes (ICSID)

Question 6

what does the WB do?

- the 3 phases

Answer 6

1. post war reconstruction- mainly european
2. after 60s- focus on developing countries (international development association)
3. after 90s- facilitate economic transition in europe; post conflict reconstruction (former yugoslavia, afghanistan, iraq)
4. after 200s- contribute to achieving the MDGs and SDGs

Question 7

what does the WB do? (3)

Answer 7

credits to finance non-private sector economic activities
main clients: mid-income countries and credit- worthy low income countries

researches development issues, created the annual world development report

economic advice to governments

Question 8

what are the conditions for WB credit?

Answer 8

good governance, economic reforms

Question 9

world bank structure - ibrd/ ida

Answer 9

1. board of governors: highest decison-making body- plenary organ
2. WB president: usually american
3. board of directors: meets frequently, executive organ, chaired by president decisions on lending proposals
   (countries who give the most money have more power, other’s are represented in groups)
4. inspection panel: complaint mechanism
5. independent evaluation group

Question 10

international development association (IDA)

Answer 10

established in the decolonization period, targets lowest income countries

more favorable conditions than ibrd: no interest and long term (30-50 years)

Question 11

international finance corporation (IFC)

Answer 11

supporting companies in developing countries - provide funding for companies that want to invest in developing countries

Question 12

multilateral investment guarantee agency (MIGA)

Answer 12

insurances against non-commercial/ political risks for private investors (like civil war)
promote economic (foreign) investments in developing countries

Question 13

international centre for settlement of investment disputes (ICSID)

Answer 13

meditation and arbitration of investment conflicts between member states and private investors from other countries

• country feels like investment is causing concern
• or investors think they have been treated unfairly

! decisions of ICSID are binding

Question 14

difference between WB and IMF

Answer 14

IMF lends money to countries experiencing balance-of-payments problems- it makes short term loans of foreign currencies that the borrowing country must use to finance the mobilization of its own currency/monetary system.

WB makes longer-term loans to pay for specific projects related to development or poverty reduction.

Question 15

mandate of the WB

Answer 15

to reduce poverty by lending money of the rich countries to the poor countries for specific development projects, and by providing technical assistance to poor countries

Question 16

objectives of the IMF

Answer 16

1. international financial cooperation: ensuring international liquidity for investments
2. monetary stability: adjusting to balance of payments difficulties

Question 17

what does the IMF do?

Answer 17

large-scale credit to states in financial insecurity
- uk (1976), Asia (1990s), 2014 european crisis (ireland, greece, portugal, spain)

• monitoring research on the financial state of member states
• general research: world economic outlook and global financial stability report

Question 18

which reports does imf write?

Answer 18

world economic outlook

global financial stability report

Question 19

regional development banks’ origins

Answer 19

dissatisfaction with WB lending among developing countries and scarcity of funding regional programs

Question 20

Asian International Infrastructure Bank (AIIB) objective

Answer 20

providing funding for new infrastructure projects in emerging Asian economies that struggle to get funding from other institutions

Question 21

criticism of AIIB

Answer 21

china’s dominance used as an instrument for foreign policy

Question 22

case: Argentina

Answer 22

the bank made loans to several projects and ti control the H1N1 flu - there were no problems

argentina adopted a neoliberal economic model in the 1990s under IMF guidance and funding - it opened the economy to foreign trade and privatized industries - the revenue from these privatizations was used to fund the governments deficits - but as it ran out of assets to sell off, the government was in an unsustainable position.

Question 23

similarities of WB and IMF

Answer 23

both pool the resources of their members and use the capital to make loans to governments with specific needs.