Conflicted Principals, Uncertain Agency: The International Monetary Fund and the Great Recession

Abstract

The G20’s renewal of faith in the International Monetary Fund (IMF) during the 2008 financial crisis appears to have reversed the IMF’s declining relevance evident in the years preceding the crisis. This article examines this putative revival of the IMF, arguing that the G20’s actions contained a paradox of delegation. On the one hand, the nature of the G20’s replenishment of the IMF’s resources during the crisis (mostly through credit lines available to the IMF) as well as the independence the major G20 economies can afford to have from the IMF (given that they are not beholden to its resources) has meant that the G20 countries faced low sovereignty costs in reviving the IMF. On the other hand, truly re‐establishing the IMF’s relevance would impose higher sovereignty costs, specifically in the form of strengthened IMF surveillance over G20 economies. This paradox of delegation suggests that the G20’s action toward the IMF does not inform properly whether the G20 states have contemplated the trade‐off between suffering sovereignty costs and achieving gains from delegation. In this regard, the proper role of the IMF in the governance of the global economy remains uncertain. Policy Implications The G20’s resuscitation of the IMF cannot be simply interpreted as indicating certainty regarding the future of the institution. In order for the IMF to fulfill its key tasks, particularly surveillance of global economic conditions, as envisioned by key members of the G20, these states need to permit the IMF to play the role of a mediator and technical expert in close coordination of their policies. The G20 states should resist the temptation to forum shop, namely charge other institutions with tasks similar to those of the IMF with a view to dispersing/avoiding sovereignty costs. It is no longer viable to hold on to prior assumptions and frameworks regarding the distribution of influence among states vis‐à‐vis the IMF – scholarly and policy works need to recognize large emerging economies as key principals of the Fund. At the same time, the IMF needs to enhance the evenhandedness of its analysis and advice in order to increase key member states’ perceptions of its effectiveness and fairness.

Back to Basics: The Great Recession and the Narrowing of IMF Policy Advice

“…Indeed, the provision of policy advice to its member states is considered to be “an integral part of operationalizing the Fund's mandate” (IEO , 1). Much of the IMF's policy advice nonetheless fails to resonate with national authorities, especially in the case of large economies where governments are unlikely to face the sovereignty costs associated with IMF loan agreements (Kaya ).…”

“…In November 2008 Iceland became the first West European country to agree a stand‐by arrangement loan with the IMF since the UK in 1976 and Italy in 1977. Five months later the April 2009 Group of Twenty leaders' summit in London agreed to triple the IMF's lending capacity to US$750 billion (Kaya ). Within 18 months of Iceland's loan agreement, a further 18 countries had negotiated stand‐by arrangements with the IMF in response to the Great Recession and the subsequent slump in global trade and consumer demand, marking a pronounced turnaround in the IMF's relevance as a crisis management institution.…”

Modeling and interpreting hydrological responses of sustainable urban drainage systems with explainable machine learning methods

“…Tree boosting methods presented in Friedman (2001) is used in this study to build machine learning models. The XGBoost machine learning software is employed for model training for its improved regularization methods, high computational efficiency, and ability to achieve state-of-the-art results on many machine learning tasks (Chen and Guestrin, 2016;Chen and He, 2020;Nielsen, 2016). Tree boosting methods build multiple regression trees that the final prediction of an input is the sum of the predictions of individual trees, as shown in Eq.…”

El nuevo institucionalismo: ¿hacia un nuevo paradigma?

“…Los esfuerzos por construirla a partir de la teorización y de la evidencia empírica no han cesado. Estos esfuerzos se han orientado principalmente al estudio del Estado (por ejemplo, Gaus, 2011;Fukuyama, 2013; Green y Colgan, 2013) y de algunas instituciones con rasgos supranacionales (por ejemplo, Egeberg, 2012;Kaya, 2012).…”