IMF and Global Public Goods: seeking a new role in the global economy

Authors

Dominik Kopiński Uniwersytet Wrocławski, Wydział Prawa, Administracji i Ekonomii, Instytut Ekonomii, Zakład Międzynarodowych Stosunków Ekonomicznych https://orcid.org/0000-0002-5826-7942
Michał Nowicki Uniwersytet Wrocławski, Wydział Nauk Społecznych, Instytut Studiów Międzynarodowych i Bezpieczeństwa, Zakład Międzynarodowych Stosunków Gospodarczych i Integracji Europejskiej https://orcid.org/0000-0002-2930-8469
Marek Wróblewski Uniwersytet Wrocławski, Wydział Nauk Społecznych, Instytut Studiów Międzynarodowych i Bezpieczeństwa, Zakład Międzynarodowych Stosunków Gospodarczych i Integracji Europejskiej https://orcid.org/0000-0003-2138-398X

DOI:

https://doi.org/10.18778/2082-4440.42.02

Keywords:

global public goods, IMF, global financial stability, multilateral cooperation

Abstract

Current global economic challenges have stimulated public demand for coordinated activities at a transnational level (as evidenced by the impact of the COVID-19 pandemic crisis). In this context, academic discourse and the forums of various multilateral organizations have invoked the concept of global public goods (GPGs). This paper explores the practical realization of the GPGs concept within the global structures of the International Monetary Fund (IMF), assessing the extent to which the wealth of services provided by the Fund may actually be considered GPGs. Approaching the subject from a theoretical perspective, the paper draws on analytical evaluations of relevant documents and IMF data sources, as well as empirical findings derived from semi-structured in-depth interviews (IDI) with representatives of international organizations (including the IMF) in Washington, DC. The findings suggest that the IMF provides a diverse array of products supportive of international financial stability (particularly ‘best-shot public goods’), and may therefore be regarded as exemplifying the GPGs concept. During times of relative global economic stability, IMF expenditure shifts toward technical support and monitoring, placing the organization in a role more akin to a provider of pure public goods. However, despite the IMF enjoying a number of competitive advantages (and resources) that would seem to preordain a role as a major GPGs provider, the GPGs concept is only marginally evoked in the organization’s publications and activities. Moreover, certain elements of the IMF’s model of operation drastically reduce the organization’s current operating capability as a GPGs provider.

Downloads

Download data is not yet available.

References

Arce D., Sandler T. (2008), Transnational public goods: Strategies and institutions. “European Journal of Political Economy”, 17(3): 493–516. https://doi.org/10.1016/S0176-2680(01)00042-8

Barrett S. (2006), Critical factors for providing transnational public goods. In Expert Paper Series Seven: Cross-Cutting Issues, Secretariat of the International Task Force on Global Public Goods.

Barrett S., Dannenberg A. (2022), The Decision to Link Trade Agreements to the Supply of Global Public Goods, “Journal of the Association of Environmental and Resource Economists”, 9(2): 273–305. https://doi.org/10.1086/716902

Beazer Q.H., Woo B. (2016), IMF conditionality, government partisanship, and the progress of economic reforms, “American Journal of Political Science”, 60(2): 304–321. https://doi.org/10.1111/ajps.12200

Bird G. (2001), IMF programs: Do they work? Can they be made to work better? “World Development”, 29(11). https://doi.org/10.1016/S0305-750X(01)00077-8

Birdsall N., Diofasi A. (2015) Global public goods for development: How much and what for, Center for Global Development.

Boorman J. (2008), An Agenda for reform of the International Monetary Fund, Occasional Paper 38. Fredris Ebert Stiftung.

Bordo M.D., Eichengreen B., Klingebiel D., Soledad Martinez-Peria M. (2001), Is crisis problem growing more severe? “Economic Policy,” 16(32). https://doi.org/10.1111/1468-0327.00070

Buchanan J. (1968), The demand and supply of public goods, Rand McNally.

Buchholz W., Sandler T. (2021), Global Public Goods: A Survey, “Journal of Economic Literature”, 59(2): 488–545. https://doi.org/10.1257/jel.20191546

Buira A. (Ed.), (2005), Reforming the governance of the IMF and the World Bank, Anthem Press.

Carbone M. (2007), Supporting or resisting global public goods? The policy dimension of a contested concept, “Global Governance”, 13(12). https://doi.org/10.1163/19426720-01302004

Cornes R., Sandler T. (1986), The theory of externalities, public goods and club goods, Cambridge University Press.

Cornes R., Sandler T. (1994), Are public goods myths?, “Journal of Theoretical Politics”, 6(3): 369–385. https://doi.org/10.1177/0951692894006003006

Cowen T. (1985), Public goods definitions and their institutional context: A critique of public goods theory, “Review of Social Economy”, 43(1): 53–63. https://doi.org/10.1080/00346768500000020

Creel J., Hubert P., Labondance F. (2015), Financial stability and economic performance, “Economic Modelling”, 48(C): 25–40. https://doi.org/10.1016/j.econmod.2014.10.025

Crockett A. (1997), Why is financial stability a goal of public policy? In Federal Reserve Bank of Kansas City (Ed.), Managing financial stability in a global economy, Federal Reserve Bank of Kansas City.

Daniel G., Arce M., Sandler T. (2002), Regional public goods: Typologies, provision, financing, and development assistance, EDGI.

Desai R.M., Vreeland J.R. (2001), Global governance in a multipolar world: The case for regional monetary funds, “International Studies Review”, 13(1): 109–121. https://doi.org/10.1111/j.1468-2486.2010.01002.x

Edwards R.W. (2008), Policy and statistical issues underpinning financial stability: The IMF perspective. In OECD, Statistics, knowledge and policy 2007: Measuring and fostering the progress of societies.

Eichengreen B. (2004), Financial instability. In B. Lomborg (Ed.), Global Crises, Global Solutions (pp. 251–300), Cambridge University Press. https://doi.org/10.1017/CBO9780511492624.006

Eichengreen B., Woods N. (2015), The IMF’s unmet challenges, “The Journal of Economic Perspectives”, 30(1): 29–51. https://doi.org/10.1257/jep.30.1.29

EPG (2018), Making the global financial system work for all: Report of the G20 Eminent Persons Group on global financial governance.

Eurodad (2006), Eurodad Report: World Bank and IMF conditionality: a development injustice.

European Central Bank (n.d.), Financial stability and macroprudential policy. https://www.ecb.europa.eu/ecb/tasks/stability/html/index.en.html (accessed: 17.04.2018).

Feldstein M. (1998), Refocusing the IMF, “Foreign Affairs”, 77(2). https://doi.org/10.2307/20048786

Ferguson W., Hartmann P., Panetta F., Portes R., Laster D. (2008), International financial stability, Geneva Reports on the World Economy 9. International Center for Monetary and Banking Studies (ICMB).

Ferroni, M. (2000). Reforming foreign aid: The role of international public goods. Operations Evaluation Department (OED) Working Paper Series No. 1.

Ferroni M., Mody A. (2002), International public goods: Incentives, measurement, and financing, World Bank. https://doi.org/10.1007/978-1-4615-0979-0

Gadanecz B., Jayaram K. (2008), Measures of financial stability: A review. In Measuring financial innovation and its impact: Proceedings of the IFC Conference, Basel 26–27 August 2008, IFC Bulletin No. 31. Bank of International Settlements.

Gallagher K.P. (2015), Ruling capital: Emerging markets and the reregulation of cross-border finance, Cornell University Press. https://doi.org/10.7591/cornell/9780801453113.001.0001

Gallagher K.P., Kozul-Wright R. (2019). A new multilateralism: Geneva principles for a global green new deal, UNCTAD and Global Development Policy Center, Boston University.

Gulcin O.F., Filiz U.D. (2012), Global financial crisis, financial contagion, and emerging markets, IMF Working Paper WP/12/293. https://doi.org/10.5089/9781475551167.001

Hardin G. (1968), The tragedy of the commons, “Science”, 162(3859): 1243–1248. https://doi.org/10.1126/science.162.3859.1243

IEO (2013), Evaluation report: The role of the IMF as trusted advisor.

IEO (2014a), Evaluation report: Recurring issues from a decade of evaluation: Lessons for the IMF. https://doi.org/10.5089/9781498343237.007

IEO (2014b), Evaluation report: IMF response to the financial and economic crisis. https://doi.org/10.5089/9781498342643.007

IEO (2016), Evaluation report: The IMF and the crises in Greece, Ireland, and Portugal.

IEO (2019a), Evaluation report: The IMF and fragile states.

IEO (2019b), Evaluation report: IMF financial surveillance.

IMF (1998), Financial crises: Characteristics of vulnerability. In World economic outlook 1998.

IMF (2017a), Annual Report 2017: Promoting inclusive growth.

IMF (2017b), Greece: Financial position in the Fund as of February 28, 2017.

IMF (2017c), Ireland: Financial position in the Fund as of February 28, 2017.

IMF (2017d), Portugal: Financial position in the Fund as of February 28, 2017.

IMF (2018a), IMF capacity development. Retrieved April 15, 2018, from https://www.imf.org/en/About/Factsheets/imf-capacity-development

IMF (2018b), IMF lending. Retrieved April 15, 2018, from https://www.imf.org/en/About/Factsheets/IMF-Lending

IMF (2018c), IMF surveillance. Retrieved April 15, 2018, from https://www.imf.org/en/About/Factsheets/IMF-Surveillance

IMF (2018d), Annual report 2018: Building a shared future.

IMF (2020a, April 15), Catastrophe Containment and Relief Trust (CCRT). Retrieved April 15, 2020, from https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/16/49/Catastrophe-Containment-and-Relief-Trust

IMF (2020b), Emergency financing and debt relief, Retrieved June 10, 2020, from https://www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker

IMF (2020c), The IMF’s response to COVID-19. Retrieved June 10, 2020, from https://www.imf.org/en/About/FAQ/imf-response-to-covid-19

IMF (2020d), World economic outlook update: A crisis like no other, an uncertain recovery.

IMF (2021), Total IMF credit outstanding for all members from 1984–2021. Retrieved July 10, 2021, from https://www.imf.org/external/np/fin/tad/extcred1.aspx

IMF (2021a, March 3), The IMF at a glance. Retrieved August 20, 2021, from https://www.imf.org/en/About/Factsheets/IMF-at-a-Glance

IMF (2022), Annual raport 2022. Crisis upon crisis

IMF (2023), Total IMF credit outstanding for all members from 1984–2023. Retrieved May 23, 2023, from https://www.imf.org/external/np/fin/tad/extcred1.aspx

Ionescu A. (2014), The functionality of IMF programs in economics, “Procedia – Social and Behavioral Sciences”, 116(21): 4135–4139. https://doi.org/10.1016/j.sbspro.2014.01.904

Jensen N.M. (2004), Crisis, conditions, and capital: The effect of International Monetary Fund agreements on foreign direct investment inflows, “The Journal of Conflict Resolution”, 48(2): 194–210. https://doi.org/10.1177/0022002703262860

Joyce J.P. (2013). The IMF and global financial crises: Phoenix rising?. Cambridge University Press. https://doi.org/10.1017/CBO9781139029735

Joyce J.P., Sandler T. (2018), IMF retrospective and prospective: A public goods viewpoint, “The Review of International Organization”, 3(3): 221–238. https://doi.org/10.1007/s11558-007-9029-7

Kanbur R. (2017), What is the World Bank good for? Global public goods and global institutions, CEPR Discussion Paper No. DP12090.

Kanbur R., Sandler T., Morrison K. (1999), The future of development assistance: Common pools and international public goods, Policy Essay No. 25. Overseas Development Council.

Kapur D. (2002), The common pool dilemma of global public goods: Lessons from the World Bank’s net income and reserves, “World Development”, 30(3): 337–354. https://doi.org/10.1016/S0305-750X(01)00120-6

Kaul I., Conceicao P., Le Goulven K., Mendoza R. (Eds.), (2003), Providing global public goods: Managing globalization, UNDP. https://doi.org/10.1093/0195157400.001.0001

Kaul I., Grubnerg I., Stern M.A. (Eds.), (1999), Global public goods: International cooperation in the 21st century, Oxford University Press. https://doi.org/10.1093/0195130529.001.0001

Kindleberger C.P. (1986). International public good without international government, “American Economic Review”, 76(1): 1–13.

Kindleberger P., Aliber R.Z. (2005), Manias, panics and crashes: A history of financial crises, 5th edition. Palgrave Macmillan. https://doi.org/10.1057/9780230628045

Kopiński D., Wróblewski M. (2021), Reimagining the World Bank: Global Public Goods in an Age of Crisis, “World Affairs”, 184(2): 151–175. https://doi.org/10.1177/00438200211013486

Kornek U., Edenhofer O. (2020), The strategic dimension of financing global public goods, “European Economic Review”, vol. 127.

Lane T., Philips S. (2002), Moral hazard: Does IMF financing encourage imprudence by borrowers and lenders? IMF Economic Issues No. 28. https://doi.org/10.5089/9781589060883.051

Lipton D. (2018, December 11), Why a new multilateralism now? https://www.imf.org/en/News/Articles/2018/12/10/sp121118-why-a-new-multilateralism-now

Long D., Woolley F. (2009), Global public goods, critique of an UN discourse, “Global Governance”, 15(1). https://doi.org/10.1163/19426720-01501007

Lorenzo F., Noya N. (2006), IMF policies for financial crises prevention in emerging markets, UNCTAD, G-24 Discussion Paper Series No. 41.

Meltzer A. (2003), What future for the IMF and the World Bank? Quarterly International Economics Report, Carnegie Mellon Gailliot Center for Public Policy.

Meltzer A., Bergsten F., Calomiris C., Campbell T., Feulner E., Hoskins W., Huber R., Levinson J., Sachs J., Torres E. (2000), Results and recommendation of the International Financial Institutions Advisory Commission: Final report to the U.S. Congress and Department of Treasury.

Mishkin F.S. (1991), Anatomy of a financial crisis, NBER Working Paper No. 3934. https://doi.org/10.3386/w3934

Mishkin F.S. (1999), Global financial instability: Framework, events, issues, “Journal of Economic Perspectives”, 13(4): 3–20. https://doi.org/10.1257/jep.13.4.3

Musgrave R. (1959), The theory of public finance: A study in public economy, McGraw-Hill. https://doi.org/10.1007/978-1-349-23426-4

Musgrave R., Musgrave P.B. (2003), Prologue in advancing the concept of public goods. In Kaul I., Conceicao P., Le Goulven K., Mendoza R. (Eds.), Providing global public goods. Managing globalization, Oxford University Press.

Nissan S. (2015, May 11), As obituaries are written for the World Bank, the IMF is set to become indispensable, “Financial Times”, Opinion: beyondbrics.

Obstfeld M., Taylor A.M. (2017), International monetary relations: Taking finance seriously, “The Journal of Economic Perspectives”, 31(3): 3–28. https://doi.org/10.1257/jep.31.3.3

Orastean R. (2014), The IMF lending activity: A survey. “Procedia Economics and Finance”, 16: 410–416. https://doi.org/10.1016/S2212-5671(14)00820-X

Ötker-Robe I. (2014), Global risks and collective action failures: What can the international community do? IMF Working Paper WP/14/195. https://doi.org/10.5089/9781498396554.001

Paloni A., Zanardi M. (Eds.), (2006), The IMF, World Bank and policy reform, Routledge.

Presbitero A.F., Zazzaro A. (2012), IMF lending in times of crisis: Political influences and crisis prevention, “World Development”, 40(10): 1944–1969. https://doi.org/10.1016/j.worlddev.2012.04.009

Radlett S., Sachs J. (1998), The East Asian financial crisis: Diagnosis, remedies, prospects, Brookings Papers on Economic Activity No. 28. https://doi.org/10.2307/2534670

Reinhart C.M., Trebesch C. (2016), The International Monetary Fund: 70 years of reinvention, “The Journal of Economic Perspectives”, 30(1): 3–27. https://doi.org/10.1257/jep.30.1.3

Russett B.M., Sullivan J.D. (1971), Collective goods and international organization, “International Organization”, 25(4): 845–865. https://doi.org/10.1017/S0020818300017768

Samuelson R. (1954), The pure theory of public expenditure, “The Review of Economics and Statistics”, 36. https://doi.org/10.2307/1925895

Sandler T. (1997), Global challenges: An approach to environmental, political, and economic problems, Cambridge University Press. https://doi.org/10.1017/CBO9781139174886

Sandler T. (1998), Global and regional public goods: A prognosis for collective action, “Fiscal Studies”, 19(3): 221–247. https://doi.org/10.1111/j.1475-5890.1998.tb00286.x

Sandler T. (2003), Assessing the optimal provision of public goods: In search of the Holy Grail. In Kaul I., Conceicao P., Le Goulven K., Mendoza R. (Eds.), Providing global public goods. Managing globalization, Oxford University Press. https://doi.org/10.1093/0195157400.003.0006

Schinasi G.J. (2004), Defining financial stability, IMF Working Paper WP/04/187. https://doi.org/10.5089/9781451859546.001

Secretariat of the International Task Force on Global Public Goods (2004), Meeting global challenges: International cooperation in the national interest: Towards an action plan for increasing the provision and impact of global public goods.

Smith R., Beaglehole R., Woodward D., Drager N. (2003), Global public goods for health: Health economic and public health perspectives, Oxford University Press. https://doi.org/10.1093/oso/9780198525448.001.0001

Stiglitz J. (1995), The theory of international public goods and the architecture of international organisations, United Nations Background Paper No. 7. Department for Economic and Social Information and Policy Analysis.

Stiglitz J. (2002), Globalization and its discontents, Penguin Books.

Stiglitz J. (2006), Global public goods and global finance; Does global governance ensure that the global public interest is served. In Touffut J.P. (Ed.), Advancing Public Goods, Edward Elgar Publishing. https://doi.org/10.4337/9781847201843.00016

Villafranca A. (2014), Reforming the global economic governance: ‘Public goods’ and balance of power, ISPI Working Paper No. 54.

WEF (2008), The financial development report 2008, World Economic Forum.

Wei S. (2020, April 20), Chair of Chatham House, gives his views on a world after COVID-19, “Global Times”. https://www.globaltimes.cn/content/1186192.shtml

Weiss M. (2013), International Monetary Fund: Background and issues for Congress, Congressional Research Service, CRS Report for Congress 7–7500.

Woods N. (2006), The globalizers: The IMF, the World Bank, and their borrowers, Cornell University Press.

Woodward D. (2007), IMF voting reform: Need, opportunity and options, UNCTAD, G-24 Discussion Paper Series No. 49.

World Bank (2000), Annual review of development assistance (ARDE).

World Bank (2007), Global public goods: A framework for the role of the World Bank.

Wróblewski M. (2009), IMF and World Bank towards financial crises, Adam Marszalek Publishing House.

Wróblewski M. (2014), MFW wobec globalnego kryzysu finansowego – nowe wymiary pomocy pożyczkowej i programowej. In Budnikowski A., Kuźniar A. (Eds.), Nowe procesy w gospodarce światowej. Wnioski dla Polski, Oficyna Wydawnicza SGH.

Wyplosz C. (1999), International financial instability. In Kaul I., Grunberg I., Stern M.A. (Eds.), Global public goods: International cooperation in the 21st century, Oxford University Press. https://doi.org/10.1093/0195130529.003.0009