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Applying the Lessons of Asia : The IMF’s Crisis Management Strategy in 2008

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  • Shinji Takagi

    (Asian Development Bank Institute)

Abstract

The paper examines the recent European crisis management programs of the International Monetary Fund (IMF) to see how the lessons of Asia were applied. Compared to the Asian programs of 1997, the European programs of 2008 were better funded and their structural conditionality more focused. Other than these, the overall thrust of the programs was similar : fiscal and monetary tightening, coupled with banking reforms. The real difference, however, was not so much about content but about philosophy. Relative to the Asian programs, the European programs were characterized by more emphasis on ownership, greater collaboration among stakeholders, more realistic assumptions and greater transparency about the risks and the logic of policy actions, and more built-in flexibility of targets and policy options. This approach to crisis management, foreshadowing the major reform of conditionality in March 2009, incorporated the changes that had been made since the Asian crisis in the IMFs policies and procedures to manage capital account crises more effectively. Despite these recent changes in the way the IMF does its business, Asia appears to remain unengaged. The lesson Asia should draw from Europe is that it should build a strong regional institution to complement, and catalyze the involvement of, the IMF. Only then can the lessons learned in Asia over 10 years ago be applied back in Asia to benefit its own people.

Suggested Citation

  • Shinji Takagi, 2010. "Applying the Lessons of Asia : The IMF’s Crisis Management Strategy in 2008," Macroeconomics Working Papers 22822, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:macroe:22822
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    References listed on IDEAS

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    Cited by:

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    2. Biswajit Nag & Partha Ray, 2021. "Two Crises Separated by a Decade: Political Economy of Trade Strategy and Reserves Accumulation in East Asia," Journal of Asian Economic Integration, , vol. 3(2), pages 169-189, September.

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    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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