Advanced Search
MyIDEAS: Login

Read my lips: The role of information transmission in multilateral reform design

Contents:

Author Info

  • Marchesi, Silvia
  • Sabani, Laura
  • Dreher, Axel

Abstract

Context-specific knowledge is crucial to crafting multilateral reform programs. Nonetheless local knowledge often consists of unverifiable information, thus the quality of countries' reports depends on the conflict of interests faced by the recipient and the multilateral. We compare the performance of a "delegation-scheme" against a "centralization-scheme." We find that recipients' discretion in the choice of reforms (delegation) should only be increased when the countries' local knowledge is strictly more important than the multilateral's information. Conversely, a reduction in the conflict of interests may lead the multilateral in to allowing the recipient less freedom in designing reforms (centralization). Our empirical results support these theoretical predictions.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6V6D-51JXFSW-1/2/2779ffc8032958a4ab34c7857fde69f9
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 84 (2011)
Issue (Month): 1 (May)
Pages: 86-98

as in new window
Handle: RePEc:eee:inecon:v:84:y:2011:i:1:p:86-98

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505552

Related research

Keywords: IMF conditionality Delegation Communication Ownership;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Besley, Timothy & Case, Anne, 1995. "Does Electoral Accountability Affect Economic Policy Choices? Evidence from Gubernatorial Term Limits," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 769-98, August.
  2. Alberto Alesina & Guido Tabellini, 1988. "Voting on the Budget Deficit," NBER Working Papers 2759, National Bureau of Economic Research, Inc.
  3. Silvia Marchesi & Laura Sabani, 2005. "IMF Concern for Reputation and Conditional Lending Failure: Theory and Empirics," Development Working Papers 206, Centro Studi Luca d\'Agliano, University of Milano.
  4. Easterly, William, 2008. "Institutions: top down or bottom up?," MPRA Paper 39137, University Library of Munich, Germany.
  5. Avinash Dixit, 2009. "Governance Institutions and Economic Activity," American Economic Review, American Economic Association, vol. 99(1), pages 5-24, March.
  6. Svensson, Jakob, 1997. "When is foreign aid policy credible : aid dependence and conditionality," Policy Research Working Paper Series 1740, The World Bank.
  7. Roland Vaubel, 1986. "A public choice approach to international organization," Public Choice, Springer, vol. 51(1), pages 39-57, January.
  8. Roland Vaubel, 2006. "Principal-agent problems in international organizations," The Review of International Organizations, Springer, vol. 1(2), pages 125-138, June.
  9. Martin Steinwand & Randall Stone, 2008. "The International Monetary Fund: A review of the recent evidence," The Review of International Organizations, Springer, vol. 3(2), pages 123-149, June.
  10. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, EconWPA, revised 08 Jan 2004.
  11. Milton Harris & Artur Raviv, 2008. "A Theory of Board Control and Size," Review of Financial Studies, Society for Financial Studies, vol. 21(4), pages 1797-1832, July.
  12. Allan Drazen & Peter Isard, 2004. "Can Public Discussion Enhance Program Ownership?," NBER Working Papers 10927, National Bureau of Economic Research, Inc.
  13. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
  14. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
  15. Alberto Alesina & Allan Drazen, 1989. "Why are Stabilizations Delayed?," NBER Working Papers 3053, National Bureau of Economic Research, Inc.
  16. Wouter Dessein, 2002. "Authority and Communication in Organizations," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 811-838.
  17. Anna Ivanova, 2006. "Outcomes-Based Conditionality: Its Role and Optimal Design," IMF Working Papers 06/128, International Monetary Fund.
  18. James Vreeland, 2006. "IMF program compliance: Aggregate index versus policy specific research strategies," The Review of International Organizations, Springer, vol. 1(4), pages 359-378, December.
  19. Christopher Kilby, 2006. "Donor influence in multilateral development banks: The case of the Asian Development Bank," The Review of International Organizations, Springer, vol. 1(2), pages 173-195, June.
  20. Mohsin S. Khan & Sunil Sharma, 2001. "IMF Conditionality and Country Ownership of Programs," IMF Working Papers 01/142, International Monetary Fund.
  21. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-51, November.
  22. Wolfgang Mayer & Alex Mourmouras, 2008. "IMF conditionality: An approach based on the theory of special interest politics," The Review of International Organizations, Springer, vol. 3(2), pages 105-121, June.
  23. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2010. "Does membership on the UN Security Council influence IMF conditionality?," KOF Working papers 10-262, KOF Swiss Economic Institute, ETH Zurich.
  24. Hagen, Rune Jansen, 2009. "Basic analytics of multilateral lending and surveillance," Journal of International Economics, Elsevier, vol. 79(1), pages 126-136, September.
  25. Raghuram G. Rajan, 2008. "The Future of the IMF and the World Bank," American Economic Review, American Economic Association, vol. 98(2), pages 110-15, May.
  26. Alex Mourmouras & Anna Ivanova & George C. Anayotos & Wolfgang Mayer, 2003. "What Determines the Implementation of IMF-Supported Programs?," IMF Working Papers 03/8, International Monetary Fund.
  27. Silvia Marchesi & Laura Sabani, 2005. "Prolonged Use and Conditionality Failure: Investigating the IMF Responsibility," Development Working Papers 202, Centro Studi Luca d\'Agliano, University of Milano.
  28. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2010. "Does membership on the UN security council influence IMF conditionality?," Center for European, Governance and Economic Development Research Discussion Papers 104, University of Goettingen, Department of Economics.
  29. Peter Isard & Allan Drazen, 2004. "Can Public Discussion Enhance Program Ownership?," IMF Working Papers 04/163, International Monetary Fund.
  30. Miguel A. Savastano & Michael Mussa, 1999. "The IMF Approach to Economic Stabilization," IMF Working Papers 99/104, International Monetary Fund.
  31. Drazen, Allan, 2002. "Conditionality and Ownership in IMF Lending: A Political Economy Approach," CEPR Discussion Papers 3562, C.E.P.R. Discussion Papers.
  32. Allan Drazen, 2002. "Conditionality and Ownership in IMF Lending: A Political Economy Approach," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 36-67.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Silvia Marchesi & Laura Sabani, 2013. "Does it take two to tango? How to improve cooperation between the IMF and the World Bank," Working Papers 232, University of Milano-Bicocca, Department of Economics, revised Feb 2013.
  2. Axel Dreher & Silvia Marchesi, 2013. "Information Transmission and Ownership Consolidation in Aid Programs," Development Working Papers 356, Centro Studi Luca d\'Agliano, University of Milano.
  3. Roland Hodler, 2011. "Development (Paradigm) Failures," Working Papers 11.01, Swiss National Bank, Study Center Gerzensee.
  4. Axel Dreher & Kai Gehring & Christos Kotsogiannis & Silvia Marchesi, 2013. "Information transmission within federal fiscal architectures: Theory and evidence," Working Papers 253, University of Milano-Bicocca, Department of Economics, revised Sep 2013.
  5. Silvia Marchesi & Alessandro Missale, 2012. "Did high debts distort loans and grants allocation to IDA countries?," Working Papers 226, University of Milano-Bicocca, Department of Economics, revised Aug 2012.
  6. Claudio Morana, 2012. "Oil Price Dynamics, Macro-Finance Interactions and the Role of Financial Speculation," Working Papers 2012.07, Fondazione Eni Enrico Mattei.
  7. Silvia Marchesi & Laura Sabani, 2013. "Does it take two to tango? Improving cooperation between the IMF and the World Bank: theory and empirical evidence," Working Papers - Economics wp2013_20.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
  8. Molly Bauer & Cesi Cruz & Benjamin Graham, 2012. "Democracies only: When do IMF agreements serve as a seal of approval?," The Review of International Organizations, Springer, vol. 7(1), pages 33-58, March.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:inecon:v:84:y:2011:i:1:p:86-98. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.