And the real puzzle is why the "left" is for the abolition of--imperfect--institutions of collective self-management responsible to democratically-elected governments, and is lining up on the side of Hayekian laissez-faire: that the flaws markets have always arise only because governments stick their noses into them. Brad DeLong
[mbs] The explanation of the puzzle is that the boyz at Main Treasury would prefer to ignore substantive left criticism and proposals because they would rather die than surrender their monopoly of control. So we have a replay of the Washington Monument gag. My way or no way; apres moi, le deluge. Me or the laissez-faire barbarians. So they tell everyone stuff like the following does not exist, and that Joseph Stiglitz gets his information from Harvey the Rabbit. The discerning reader may judge whether what follows corresponds to BDL's bleak panorama of brainless dissent.
April 13, 2000 Issue Brief #141
MELTZER REPORT MISSES THE MARK Commissions recommendations for World Bank, IMF need further consideration
by Christian Weller
What should the global financial architecture look like, and who should be playing a role in shaping it? . . .
[cut to chase]
Redesigning the international financial institutions The IMF and World Bank have been criticized for their mishandling of financial crises and the ineffective design and implementation of development projects, providing an impetus to reform these and other international financial institutions (IFIs). Fortunately, the issue is no longer whether, but how these institutions should be reformed.
New and improved IFIs are needed, requiring a reconsideration of the IMF and World Banks policies and operations.
To make funding more appropriate to the task at hand, namely to improve the living standards for working people in countries around the world, the policies of the IFIs should be changed. These policy changes include:
providing more grants and less loans, which would give recipient countries less incentive to raid their environment and exploit their workers to repay international loans; encouraging internal development over dependence on external capital flows; encouraging and providing assistance in the design and implementation of effective capital controls; requiring adherence to labor and environmental standards by international borrowers or grant recipients. International Labor Organization certification of labor standards, for instance, could become a condition for receiving IFI grants or loans.2 Changing the policies of the IFIs is one thing, external accountability is yet a separate issue. The external accountability of the IFIs could be increased by making policy decisions more public than in the past. Greater transparency of IMF and World Bank operations is a useful tool once appropriate policies have been identified and it has been determined to whom the IFIs should be accountable. Thus, the IFIs should create or improve mechanisms for consultation with and accountability to all relevant groups in the countries that will be affected by their policies. Labor unions and NGOs seem natural partners in increasing the external accountability of the IFIs.
Simply changing IFI policies without increasing these institutions accountability to a broader share of the population will do little to universally improve living standards. Once external accountability of the IFIs is increased, a new policy orientation is likely to benefit everybody and not just financial investors.