Sarah Babb

The Rebirth of the Liberal Creed: Paths to Neoliberalism in Four Countries1

Since the 1970s, market‐based economic policies have been institutionalized as a nearly global policy paradigm. Using four national case studies, this article shows that economic and financial globalization played a critical role in fostering the transition to neoliberal policies, but that local institutional conditions were decisive in shaping the nature and meaning of the shift. While the analysis finds that developing countries appear more dependent upon direct external pressures than developed ones, it also shows that institutionalized patterns of state‐society relations determined the way in which neoliberal transitions were carried out, somewhat irrespectively of the level of economic development. In Chile and Britain, poorly mediated distributional conflict created the ideological conditions for a “monetarist” revolution. In Mexico and France, on the other hand, neoliberalism was understood mainly as a necessary step to adapt the country to the international economy.

The Washington Consensus as transnational policy paradigm: Its origins, trajectory and likely successor

ABSTRACT This paper explores the origins and trajectory of the Washington Consensus – the ideas associated with the developing countries’ move to free markets in the 1980s and 1990s. I argue that the Consensus was a transnational policy paradigm, shaped by both scholarly and political forces (Hall, 1993). At the core of the Consensus was the international financial institutions’ practice of conditionality – making loans to governments in exchange for policy reforms. The Consensus was subsequently weakened by its own unintended consequences, by political forces both within Washington and worldwide and by intellectual changes in the field of economics. However, I argue that the Consensus has yet to encounter any serious rivals.

Embeddedness, Inflation, and International Regimes: The IMF in the Early Postwar Period1

This article explores why the International Monetary Fund (IMF) adopted a set of orthodox, anti‐inflationary policy prescriptions during the early postwar period, when Keynesian thinking was predominant. Drawing on primary documents from the IMF archive and secondary literature, the author argues that these early trends were fostered by dynamics familiar to organizational sociologists. Because organizations are designed by architects possessing bounded rationality, they must adapt to circumstances unforeseen at their founding. They may also be pushed in unexpected directions by the influential actors in their environments, the power of professionals, and the propensity to routinization. International regimes, which are partly made up of organizations, may therefore be prone to internal contradictions.

Book Review: Hypocrisy Trap: The World Bank and the Poverty of ReformHypocrisy Trap: The World Bank and the Poverty of Reform, by WeaverCatherine. Princeton, NJ: Princeton University Press, 2008. 224 pp.

The World Bank is famous for its hypocrisy. Critics charge that the Bank issues grand statements about “sustainable development” while sponsoring environmentally damaging projects, instructs governments to enhance accountability while itself remaining unaccountable, and continually promises internal reforms that somehow never materialize. Is the World Bank a hypocritical organization? The answer in this significant new book, as its title suggests, is a resounding “yes.” Yet Catherine Weaver is not primarily interested in establishing the fact of World Bank hypocrisy, which has been amply demonstrated elsewhere, but rather in explaining it. Her explanation, in brief, is that the World Bank is subject to the same kinds of pressures and pathologies that plague all complex organizations. Of particular importance, she argues, is the clash between external pressures and internal bureaucratic goals. To manage such conflicting forces, the Bank creates gaps between its rhetoric and action (“decoupling”). Yet the resulting hypocrisy only makes it more vulnerable to criticism and hence threatens its legitimacy and survival. Reform initiatives intended to bridge the gap tend only to result in new layers of hypocrisy. Although Weaver is a political scientist, her book will appeal to sociologists for at least two reasons. The first is methodological. Weaver’s book draws on more than 100 interviews with current and former World Bank staffers and other Bank observers, conducted over the course of eight years—a serious piece of fieldwork by sociological or even anthropological standards. It also makes strategic use of information “leaked” to the press, gathered by NGOs, and disseminated by the Bank’s own Independent Evaluation Group. These sources give readers a rare glimpse into the black box of a beleaguered and often secretive organization. Readers may be surprised to learn that Bank staffers are keenly aware of their employer’s pathologies and insincerities, and often have considerable insight into the dynamics behind them. Yet even the Bank’s ostensibly all-powerful Managing Directors are seemingly unable to overcome the massive internal and external forces arrayed against meaningful reform. Second, Hypocrisy Trap will appeal to sociologists because of its explicit invocation of the sociology of organizations as an alternative to the rational choice assumptions that predominate in international relations theory. Sociologists have traditionally argued that neither organizations nor the actors that create them are perfectly rational. Organizations evolve in unexpected and unintended ways, are shaped by their institutional environments, and develop their own particular internal cultures. Organizational culture, particularly what Weaver terms the Bank’s culture of “economic, apolitical, and technical rationality” plays a key explanatory role in this book, as does the concept of external control. At the same time, this book reflects its disciplinary pedigree in ways that some sociologists may find less satisfying. Readers accustomed to Geertzian “thick description” will be tantalized by quotes from Bank insiders (many of whom chose to maintain confidentiality) and disappointed that there aren’t more of them. One hopes that Weaver has articles in the pipeline that make greater use of the rich, qualitative data she labored so many years to collect. Meanwhile, sociologists of organizations may find themselves yearning for a finer differentiation among various organizational theories, and a bolder statement of which theoretical tradition best fits the case at hand. This book soundly debunks international relations theories assuming the rationality of international organizations (either as promoters of collective or hegemonic interests). But organizational sociologists will be more interested in knowing about which dynamics, specifically, are most responsible for this irrational outcome. And although the author is careful to distinguish between different organizational-theoretical traditions at the outset, it becomes somewhat difficult in subsequent empirical chapters for the reader to parse out the respective roles of organizational culture,