Aid and the Political Economy of Policy Change

BOOK COVER......Page 1
HALF-TITLE......Page 2
TITLE......Page 3
COPYRIGHT......Page 4
DEDICATION......Page 5
CONTENTS......Page 6
TABLES......Page 8
PREFACE......Page 9
LIST OF ABBREVIATIONS......Page 11
I The spread of conditionality......Page 13
II The modalities of conditionality......Page 17
A consensual view......Page 21
The involuntary nature of stipulated policies......Page 22
IV The legitimation of conditionality......Page 23
Notes......Page 29
I Introduction and caution......Page 31
The literature......Page 33
World Bank programmes......Page 35
IMF programmes......Page 37
Overview......Page 38
Evidence on implementation......Page 39
Two misleading reports......Page 43
Direct evidence on policy leverage......Page 50
IV Implementation and results......Page 52
V Social effects and the management of change......Page 55
VI Conclusions......Page 60
Notes......Page 62
3 CONDITIONALITY AND ADJUSTMENT IN SOUTH EAST ASIA AND LATIN AMERICA......Page 64
Criteria of adjustment......Page 65
The initial situation......Page 66
Macroeconomic management......Page 68
Market friendliness and openness......Page 70
Voluntary adjustment......Page 72
I–4 The special case of the Philippines......Page 73
The influence of the IFIs’ financial support......Page 76
Policy dialogue and the role of technocrats......Page 77
I–6 Conclusions on South-east Asia......Page 79
II Latin America......Page 80
II–1 Policies before the turnaround......Page 81
II–2 The turning points......Page 85
Conditionality......Page 88
Policy dialogue......Page 90
II–4 Other external influences......Page 91
II–5 Internal factors influencing policy change......Page 92
II–6 Conclusions on Latin America......Page 94
Notes......Page 95
I Introduction......Page 96
II Meaning and measurement of ownership......Page 97
III The effects of ownership......Page 99
IV Ownership matters because interests conflict......Page 102
V National resentment and the erosion of sovereignty......Page 104
VI The extent of interest conflicts......Page 108
VII Conclusion......Page 109
Notes......Page 110
An informal statement of the principal—agent problem......Page 111
Some qualifications......Page 113
The methods employed and the limitations of the study......Page 115
The appropriateness of an agency approach......Page 119
Conflicting objectives......Page 121
Distributional costs......Page 123
Transactions costs......Page 125
The influence of long-term relationships......Page 126
Does conditionality raise policy credibility?......Page 129
The influence of shocks......Page 131
APPENDIX: THE SELECTION PROCEDURES FOR THE COUNTRY SAMPLE......Page 134
a Relating to participation constraints......Page 135
c Other influences on implementation......Page 136
Notes......Page 137
The adequacy of the reward system......Page 139
Is non-implementation penalized?......Page 143
Kenya......Page 144
Turkey......Page 145
Zambia......Page 146
Conditionality and moral hazard......Page 148
External factors......Page 149
Internal pressures......Page 153
Adverse selection and the debt problem......Page 154
Hurry-up lending......Page 156
Institutional factors......Page 157
Asymmetrical information and enforcement costs......Page 159
A recapitulation......Page 161
Other evidence on the influence of national politics......Page 163
Does conditionality tip the balance?......Page 165
Notes......Page 168
I A paradox revisited......Page 170
Criteria and assessment......Page 172
The sanctions analogy......Page 177
The costs of failure......Page 178
The possibilities of doing better......Page 181
Conclusion on conditionality......Page 185
The search for an alternative......Page 186
The principles of an alternative model......Page 187
Selectivity......Page 188
Support......Page 190
Dialogue......Page 192
Identifying ownership......Page 193
Maximizing influence......Page 196
A residual role for conditionality?......Page 197
Changing donor practices......Page 200
Some difficulties......Page 201
A postscript on political conditionality......Page 204
Notes......Page 206
MASTER TABLE......Page 208
Works cited in the main text......Page 215
General......Page 223
Colombia......Page 224
South Korea......Page 225
Thailand......Page 226
The Philippines......Page 227
INDEX......Page 228