André Broome

Seeing like an International Organisation

International organisations (IOs) often serve as the ‘engine room’ of ideas for structural reforms at the national level, but how do IOs construct cognitive authority over the forms, processes and prescriptions for institutional change in their member states? Exploring the analytic institutions created by IOs provides insights into how they make their member states ‘legible’ and how greater legibility enables them to construct cognitive authority in specific policy areas, which, in turn, enhances their capacity to influence changes in national frameworks for economic and social governance. Studying the indirect influence that IOs can exert over the design of national policies has, until recently, often been neglected in accounts of the contemporary roles that IOs play and the evolution of global economic governance. By ‘seeing like an IO’, we can increase our understanding of the cognitive and organisational environment that guides an IOs actions and informs its policy advice to states, which enables a more comprehensive picture of how the everyday business of global governance works in practice. Instead of ‘black boxing’ IOs, the contributors to this special issue demonstrate how studying IOs from the inside out expands our understanding both of the policy dialogue between IOs and their member states and how IOs and states learn from each other over time.

The Importance of Being Earnest: The IMF as a Reputational Intermediary

For international organisations (IOs), building a credible reputation is hard work and ‘good’ reputations quickly become tarnished when things start to go wrong. Generating a credible reputation among its relevant international audiences enhances an IO’s authority, increasing the opportunities available to an IO to shape the behaviour of public and private actors in the global political economy and amplifying an IO’s capacity to influence international political and economic outcomes. Equally, when an IO’s reputational authority is degraded, its capacity to act as a credible external enforcement mechanism, and its ability to influence change in the global political economy more broadly, are diminished. Without a credible reputation, an IO’s material actions are more likely to be viewed as inconsequential by its audiences, and its public pronouncements are more easily dismissed as ‘cheap talk’. Since the late 1990s, numerous press reports and scholarly articles have centred on a perceived ‘crisis of legitimacy’ with regard to the contemporary global role of the International Monetary Fund (IMF). In particular, the IMF’s reputation as a credible and competent crisis manager has taken a battering in the decade since its well-publicised policy blunders during the Asian financial crisis of 1997–98, with the Group of 7 (G7) economies largely bypassing the IMF in favour of alternative multilateral forums in subsequent efforts to construct new global financial regulations. Critics of the IMF’s contemporary global role often fall into two (overlapping) camps: those who see the IMF as a neoliberal policy enforcer that pushes its own agenda and is unaccountable to its membership; and those who see the IMF as a foreign policy instrument of its major power shareholders. In an attempt to move beyond criticisms of the IMF that view the organisation simply as a global economic police force or a pawn of major powers, this article examines how the IMF has sought to reinvent itself as a reputational intermediary for its member states in the post-Bretton Woods era. The IMF has sought to maintain its relevance in an era of global capital markets and floating exchange rates by acting as a credible ‘middleman’ that can increase the willingness of public and private external financiers to provide funds to a particular country, through reducing uncertainty about the present quality of the local institutional environment and policy makers’ future intentions. This shift in the IMF’s role was motivated by the increasing salience of the theory of ‘policy credibility’ during the late New Political Economy, Vol. 13, No. 2, June 2008

The International Monetary Fund, crisis management and the credit crunch

The International Monetary Fund (IMF) has become one of the most controversial international institutions in history. The IMFs crisis management responsibilities expanded via its involvement with a series of international economic crises during the last three decades, which led to widespread calls for radical reform of the organisation in the aftermath of the emerging market crises of the 1990s. This article examines the IMFs initial response to managing the effects of the global credit crunch, focusing on the new round of large IMF loans approved in late 2008 and early 2009, to assess how much IMF lending policies have changed in practice compared with earlier international crisis episodes. While the organisation has continued to promote conventional loan policy targets aimed at achieving low inflation, low budget deficits, and sustainable public debt, the preliminary evidence also suggests the IMF is developing a more flexible approach to crisis management in borrowing member states. Changes include a greater tolerance for unorthodox policies such as short-term capital controls, greater differentiation in the treatment of borrowers based on their economic circumstances, easier access to precautionary IMF financing for prime borrowers, and more flexibility in the use of loan conditionality.

Governing the world at a distance: the practice of global benchmarking

Benchmarking practices have rapidly diffused throughout the globe in recent years. This can be traced to their popularity amongst non-state actors, such as civil society organisations and corporate actors, as well as states and international organisations (IOs). Benchmarks serve to both ‘neutralise’ and ‘universalise’ a range of overlapping normative values and agendas, including freedom of speech, democracy, human development, environmental protection, poverty alleviation, ‘modern’ statehood, and ‘free’ markets. The proliferation of global benchmarks in these key areas amounts to a comprehensive normative vision regarding what various types of transnational actors should look like, what they should value, and how they should behave. While individual benchmarks routinely differ in terms of scope and application, they all share a common foundation, with normative values and agendas being translated into numerical representations through simplification and extrapolation, commensuration, reification, and symbolic judgements. We argue that the power of benchmarks chiefly stems from their capacity to create the appearance of authoritative expertise on the basis of forms of quantification and numerical representation. This politics of numbers paves the way for the exercise of various forms of indirect power, or ‘governance at a distance’, for the purposes of either status quo legitimation or political reform.

The politics of numbers: the normative agendas of global benchmarking

Global benchmarks have grown exponentially over the last two decades, having been both applied to and developed by states, international organisations, corporations, and non-governmental organisations. As a consequence, global benchmarking is now firmly established as a distinct mode of transnational governance. Benchmarking chiefly involves the development of comparative metrics of performance, which typically take the form of highly stylised comparisons which are generated by translating complex phenomena into numerical values via simplification and extrapolation, commensuration, reification, and symbolic judgements. This process of translation takes what might otherwise be highly contentious normative agendas and converts them into formats that gain credibility through rhetorical claims to neutral and technocratic assessment. This politics of numbers has far-reaching ramifications for transnational governance, including the dimensions and effects of indirect power, expertise and agenda-setting, coordination, regulation and certification, and norm contestation and activism. This Special Issue draws upon an emerging literature to explore how and why benchmarks both align with and expand upon established models of International Relations theory and scholarship. It does so by critically examining the role of global benchmarks in key areas such as state ‘failure’, global supply chains, disaster management, economic governance, corporate social responsibility, and human development.

When do NGOs Matter? Activist Organisations as a Source of Change in the International Debt Regime

Who drives change in international economic regimes? While mainstream International Political Economy scholarship has traditionally focused on the major players within states and markets as the key sources of political and economic change, recent studies have sought to highlight the important role that is also played by a wider range of social actors. A common point of reference here is the activities undertaken by non-governmental organisations (NGOs), with the campaign to put debt relief for heavily indebted poor countries on the global agenda being often cited as the exemplar of a civil society success story. This article explores the mechanisms through which the international sovereign debt regime for the worlds poorest and most indebted economies has changed over the last 15 years, with increasing acceptance that large-scale debt relief was appropriate for a select group of countries leading to the establishment of the heavily indebted poor countries (HIPC) Initiative in 1996 and the Enhanced HIPC Initiative in 1999. Through tracing how international NGOs were able to shape the reform agenda with respect to the international sovereign debt regime for low-income countries, the article seeks to enhance our understanding of when, why, and how NGOs can potentially act as an important source of change in international economic regimes.

Hegemonic Instability and East Asia: Contradictions, Crises and US Power

One of the most influential theories in international political economy is that hegemonic power generally and the actions of the US in particular have been essential forces for stability in the international system. Yet even before the current financial crisis that has its origins in the US there were grounds for questioning this claim. Now the argument looks increasingly implausible. The essence of our argument in this article is that the USs historical record suggests that it has often been a force for global instability, as it has opportunistically sought to shift the burden of economic adjustment onto others. We develop this argument by looking at US foreign policy toward East Asia in particular, which has been deeply affected by the actions of successive America administrations, and also examine the implications of recent efforts by states to manage hegemonic instability through an expanded role for the Group of Twenty (G-20). Una de las teorías de mayor influencia en la economía política internacional es que generalmente el poder hegemónico y las intervenciones de Estados Unidos en particular, han sido fuerzas esenciales para la estabilidad del sistema internacional. Sin embargo, incluso antes de la crisis financiera actual que se originó en los Estados Unidos, existen razones para cuestionar esta afirmación. Actualmente dicho argumento parece cada vez menos probable. El argumento fundamental de este artículo, consiste en que el registro histórico de los Estados Unidos nos sugiere que más bien con frecuencia ha sido causal de inestabilidad global, porque ha buscado de manera oportunista trasladar la carga del ajuste económico a otros. Desarrollamos este argumento observando la política exterior de los Estados Unidos particularmente hacia Asia oriental, la cual se ha visto muy afectada por las continuas intervenciones de las diferentes administraciones de los Estados Unidos. También se estudiaron las implicaciones de los esfuerzos recientes de los estados para manejar la inestabilidad hegemónica a través de un mayor papel del Grupo de los Veinte (G-20).

Issues and actors in the global political economy

1. Introduction to International Political Economy 2. Theoretical Perspectives in International Political Economy 3. Contemporary Debates in International Political Economy PART I: ACTORS IN THE GLOBAL POLITICAL ECONOMY 4. State Actors 5. International Organizations 6. Club Forums 7. Market Actors 8. Non-Governmental Organizations 9. Everyday Actors PART II: Issues in the Global Political Economy 10. Global Trade 11. Global Money and National Currencies 12. Global Capital Mobility 13. Financial Crises 14. Sovereign Debt 15. Tax and Welfare 16. Global Poverty and Development 17, Resource Competition and Energy 18. The Environment and Climate Change

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 IMFs 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 organizations 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.

Watching from the sidelines? The decline of the IMF's crisis management role

This article compares the International Monetary Fund (IMF)s crisis management role during the Asian financial crisis in 1997–98 with the role it has played during the ‘credit crunch’ which emerged in the wake of the subprime crisis in the United States. With prominent calls for the construction of new forms of global financial governance to prevent a recurrence of the subprime crisis in the future, we explore how the designated guardian of the international financial system has responded to the credit crunch in order to evaluate the strengths and weaknesses of the existing system. Our comparison of the US subprime crisis and the Asian financial crisis of the late 1990s indicates that the IMF has lost credibility with its members, and particularly with its principal sponsor, the United States, which has curbed its capacity to develop multilateral solutions to major financial crises.