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Lending Credibility : The International Monetary Fund and the Post-Communist Transition - Randall W. Stone

Lending Credibility

The International Monetary Fund and the Post-Communist Transition

Paperback Published: 14th July 2002
ISBN: 9780691095295
Number Of Pages: 312

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With the end of the Cold War, the International Monetary Fund emerged as the most powerful international institution in history. But how much influence can the IMF exert over fiercely contested issues in domestic politics that affect the lives of millions? In "Lending Credibility," Randall Stone develops the first systematic approach to answering this question. Deploying an arsenal of methods from a range of social sciences rarely combined, he mounts a forceful challenge to conventional wisdom. Focusing on the former Soviet bloc, Stone finds that the IMF is neither as powerful as some critics fear, nor as weak as others believe, but that the answer hinges on the complex factor of how much credibility it can muster from country to country.

Stone begins by building a formal, game-theoretic model of lending credibility, which he then subjects to sophisticated quantitative testing on original data from twenty-six countries over the 1990s. Next come detailed, interview-based case studies on negotiations between the IMF and Russia, Ukraine, Poland, and Bulgaria. Stone asserts that the IMF has exerted startling influence over economic policy in smaller countries, such as Poland and Bulgaria. However, where U.S. foreign policy interests come more heavily into play, as in Russia, the IMF cannot credibly commit to enforcing the loans-for-policy contract. This erodes its ability to facilitate enduring market reforms. Stone's context is the postcommunist transition in Europe and Asia, but his findings carry implications for IMF activities the world over.

Winner of the AASS Ed A. Hewett book prize "An excellent book containing objective and largely convincing analysis that is accessible to a large audience."--Michael V. Alexeev, The Russian Review

List of Figuresp. xi
List of Tablesp. xiii
List of Acronymsp. xv
Prefacep. xix
Introductionp. 1
The Strategy of Transition: Inflation and Democracyp. 6
What Would We Like the IMF to Do?p. 10
Models and Datap. 13
A Formal Model of Lending Credibilityp. 15
The Modelp. 21
The Equilibriump. 22
Hypotheses Derived from the Formal Modelp. 26
Conclusionsp. 27
Appendix: A Formal Model of Lending Credibilityp. 29
Studying IMF Effectivenessp. 39
Previous Researchp. 39
Critiques Raised in the Literaturep. 46
New Critiquesp. 48
Research Designp. 49
Conclusionsp. 58
An Empirical Test of the Modelp. 59
Models of IMF Lending Decisionsp. 60
Covariates of the Duration of Punishment Intervalsp. 61
Covariates of Program Suspensionsp. 67
Models of Policy Variablesp. 73
Conclusionsp. 84
Historyp. 87
Polandp. 89
The Balcerowicz Planp. 90
The Extended Fund Facilityp. 99
The Second Stand-by Agreementp. 106
Poland's Turn to the Leftp. 109
Conclusionsp. 114
Russiap. 116
The Window of Opportunity Closes: 1992p. 118
The First Stand-by Agreement, July 1992p. 120
The Systemic Transformation Facility: May 1993p. 126
The STF Renewal, April 1994p. 128
The Second Stand-by Arrangement, April 1995p. 136
The Extended Fund Facility, February, 1996p. 138
The Third Stand-by, July 1998p. 153
The Fourth Stand-by, July 1999p. 158
Conclusionsp. 164
Ukrainep. 169
From Hyperinflation to Market Reform, 1992-1994p. 170
The Systemic Transformation Facility, 1994p. 177
The First Stand-by, 1995p. 179
The Second Stand-by, 1996p. 183
The Third Stand-by, 1997p. 190
The Extended Fund Facility, 1998p. 196
Conclusionsp. 207
Bulgariap. 209
False Starts, 1990-1994p. 210
The Origins of the Crisis, 1995-1996p. 217
Consolidation under the Currency Boardp. 227
Conclusionsp. 231
Conclusionp. 233
Research Designp. 234
Policy Implicationsp. 239
Appendixesp. 243
Datap. 245
Statistical Methodsp. 250
Multiple Imputationp. 250
Duration Modelsp. 254
List of Interviewsp. 262
Bibliographyp. 266
Indexp. 279
Table of Contents provided by Publisher. All Rights Reserved.

ISBN: 9780691095295
ISBN-10: 0691095299
Audience: Tertiary; University or College
Format: Paperback
Language: English
Number Of Pages: 312
Published: 14th July 2002
Publisher: Princeton University Press
Country of Publication: US
Dimensions (cm): 23.5 x 15.24  x 1.91
Weight (kg): 0.48