Jonathan R. Strand

Reforming the IMF's Weighted Voting System

This paper surveys various proposals to reform the IMFs quota determination process and voting regime. We first provide some necessary context by describing IMF decision rules, including the methods by which the Fund determines quotas according to countries relative positions in the world economy. This section also addresses the arbitrariness of the IMF quota determination process and how IMF decision rules hamper developing country influence within the Fund. Following this, we review several proposals designed to provide developing countries greater voice in IMF decision-making. We conclude that the problems of developing country representation are not likely to be fixed by either reallocating quotas on the margins of the existing IMF system or by tinkering with the quota-determination formulas. Rather, more fundamental institutional adjustments will be required.

The Disbursement Pattern of Japanese Foreign Aid: A Reappraisal

Three perspectives on the determinants of Japans official development assistance (ODA) program are often represented as distinct, valid explanations of the aid program. Yet few studies have attempted to simultaneously test the hypotheses generated from all three perspectives in a global study of Japanese aid flows. This study seeks to improve the understanding of the Japanese ODA program by addressing some of the gaps in the existing literature. Providing a comprehensive analysis, the article investigates the effects of different political and economic variables on Japanese aid disbursement in eighty-six countries in Africa, Asia, Latin America, and the Middle East from 1979 to 2002. The findings of the study make several contributions to the literature. First, the results provide strong support for the claim that humanitarian concerns, as measured by poverty and human rights conditions in recipient countries, are important determinants of aid allocation. Second, although much of the previous literature has hypothesized that Japans aid program seeks to promote Japans economic interests, little empirical support for this view is found in the present study. Likewise, the disbursement pattern of ODA was associated with only a limited number of US security interests; US economic interests are shown to have no effect on ODA.

Weighted Voting in the United Nations Security Council: A Simulation

Various observers have proposed weighted voting as part of an overhaul of the UN Security Council. This article employs game-theoretic methods to simulate the effects of weighting votes in the UN Security Council according to the ability of individual states, as well as on the ability of the Council to act. The authors first briefly review reform proposals. Drawing on recent proposals, they then calculate voting weights based on population, contributions to the UN, and a measure of sovereign equality. These component measures are assigned different weights in order to formulate three sets of weighted votes. After this, they define several measures of voting power that can be used to assess voting power in weighted voting systems. The measures used in this article assess the relative voting power of individual members as well as the probability the Council will engage in collective action to pass a resolution. Results of voting power simulations are then presented under both simple and qualified majority rules. The authors’ simulations indicate that under weighted voting the capacity of the Council to act is likely to increase under most conditions unless high qualified majorities are required. The simulations also demonstrate that the main problem identified with weighted voting—large deviations between voting weight and voting power—are not present in the weighted voting systems analyzed here.

Regionalizing Multilateralism: Estimating the Power of Potential Regional Voting Blocs in the IMF

This paper explores the voting power of hypothetical regional voting blocs in the Executive Board of the International Monetary Fund. We first discuss the prospect of regionally defined groups becoming more significant in the Fund’s decision-making process. After briefly outlining the IMF’s formal decision procedures, including its weighted voting system, use of special majorities, and the function of voting groups in the Fund’s Executive Board we define three indices of a priori voting power — the Banzhaf, Johnston, and Shapley-Shubik indices — which are then applied to existing voting groups. Following this we simulate several regionally defined a priori coalitions and their potential to influence outcomes in passing resolutions in the Fund using a simple majority. The coalitions we specify are based on the assumption that members of the IMF will form into voting blocs based on regionally-defined preferences. The procedures employed use existing voting weights to project the relative strengths of alternative regional blocs that could emerge within the IMF. Our results indicate that the United States would have the greatest voting power in almost all scenarios. A voting bloc comprised of European countries, however, would be able to dominate the United States unless the U.S. formed an Asia-Pacific bloc. Japan, the PRC, and other Asian countries appear to be unable to form voting blocs that would provide them with more voting power than the United States. We have benefited from the comments of three anonymous referees. We also thank Thomas Bräuninger for modifying his source code to accommodate our application of the Shapley-Shubik and Banzhaf indices.

Foreign Aid Disbursement and Recipient Voting Behavior in an International Organization: The Case of Japan and the International Whaling Commission

This study examines the relationship between Japanese foreign aid disbursement and recipient state membership and voting in the International Whaling Commission (IWC). Focusing on 104 countries for the period 1994 to 2005, we investigate whether Japan gives higher levels of aid to IWC members that vote with Japan. The effects of the independent variables are estimated with a linear mixed regression model that adjusts for country level random intercepts. Controlling for other possible influences on ODA disbursements, and employing different measures of dyadic voting similarity, the study finds Japanese aid concentrates in members of the IWC that are microstates. The findings of the paper also indicate that microstate members of the IWC who align their votes with Japan are more likely to receive Japanese ODA. By demonstrating that Japan’s strategy is focused on microstates, the study provides a more refined understanding of the mechanisms Japan employs to end the IWC’s moratorium on commercial whaling. Similar to the findings of previous research, we find that Japanese aid responds both to narrow sectoral interests and broader humanitarian goals.

Good Governance within the World Bank: Assessing Recent Reforms

Using the concept of good governance, this paper assesses how voting rules in the World Bank (IBRD) determine members’ abilities to influence the formation of winning coalitions in the Executive Board. In weighted voting systems, the percentage of votes held by an actor does not adequately measure its ability to affect outcomes because voting weights do not account for either the possible number of coalitions that may form or the number of votes needed to pass a resolution. In short, weighted voting systems cannot be straightforwardly analyzed with reference to voting weights but instead require the determination of relative voting power. Using multiple measures of a priori voting power, data are presented for before and after recent voice reforms. Results indicate that the United States, as expected, holds the largest share of voting power. Also, as expected, most borrowing members have little voting power. Unexpectedly, in several voting groups a single member is able to ensure its election to the Board. Hence, other members of these voting groups have no formal influence on the Board. The paper concludes by reflecting on the implications of voting power analysis for the concept of good governance within the World Bank.

Representation in International Organizations: The IMF

What does “representation” mean when applied to international organizations? This paper examines representation as a fundamental, if often neglected, aspect of democratic governance which, if perceived by enough members to be deficient or unfair, can interfere with the other components of good governance, as well as with performance of an organization’s core tasks. Using the case of the IMF, we examine how the concept can be applied an international organization. We posit that IMF decision making comprises a two-stage process. In the first stage members are assigned a quota, which drives their respective shares of votes. Descriptive representation best fits this stage. The second stage consists of decision-making in the Fund’s Executive Board, including the formation of constituencies in the Board and the consensual mode of decision making that is employed therein. Here, some form representation construed in principal-agent terms provides the most traction. We find that subjecting the IMF to this kind of conceptual scrutiny highlights important deficiencies in its representational practices.