The Law and Economics of Globalisation
Show Less

The Law and Economics of Globalisation

New Challenges for a World in Flux

Edited by Linda Yueh

This inter-disciplinary volume focuses on the economic and legal challenges confronting globalisation and the evolution of the global system. The Law and Economics of Globalisation discusses the hotly debated topic of globalisation from a wide set of perspectives of law, economics and international political economy.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 6: The Development of IMF and World Bank Conditionality

Axel Dreher


Axel Dreher INTRODUCTION After World War II, the international community created the International Monetary Fund (IMF) and the World Bank, taking account of the growing interdependence of international economic markets. Since the 1970s, economic, social, and political globalisation has been accelerating rapidly (Dreher 2006a, Dreher, Gaston and Martens 2008), resulting in the potential for massive capital withdrawals from a country’s financial markets and infrastructure. In an attempt to battle this contagion, IMF and World Bank conditions rapidly expanded in number and scope. Arguably, the expansion of conditionality leads to the globalization of economic policies. When the IMF and World Bank export policies favored by their major Western shareholders to developing and transition countries, policies will to some extent become similar across the world. This is not what the Institutions have been created for. As the IMF and World Bank were founded in 1944, there was no consideration of intrusive conditionality now common under the International Financial Institutions’ (IFIs) programs. However, over time, conditionality gradually increased and became inseparably associated with IMF and World Bank loans. This evolution was never without critics.1 While there are those criticizing conditionality as overly intrusive (for example Williamson 1983), others claim it would be ineffective (for example Spraos 1986). As empirical studies have shown, a huge share of conditionality has indeed not been implemented as negotiated (IFIAC 2000, Dreher 2003). Moreover, there is substantial evidence that IMF and World Bank programs fall short of their targets and are abused for political reasons by either the...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.