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In the loop: multilevel feedback and the politics of change at the IMF and World Bank

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Abstract

How can we integrate the agential influence of state preferences and the structural influence of social environments in models of change within international organisations? Through an analysis of the central aspects of the Poverty Reduction Strategy Paper (PRSP) initiative, this article argues that in isolation neither of the two dominant accounts of international organisations — the principal-agent (PA) and constructivist approaches — is able to adequately capture the progression of the initiative. Rather, I show that the evolution of the PRSP initiative is best conceptualised as an Archerian morphogenic cycle, whose unfolding can be understood by synthesising elements of the PA and constructivist approaches. The morphogenic approach provides an analytic framework capable of tracking the process of multilevel feedback from state socialisation through to policy operationalisation, and for the input of creditors, the International Financial Institutions (IFIs), and borrowing countries to be mapped.

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Notes

  1. Many thanks are owed to André Broome for his help and advice on this article, and to several members of the postgraduate community at POLSIS who read and commented on earlier drafts. I am also grateful to the editors and reviewers at JIRD for their detailed comments and insightful suggestions.

  2. Thanks are owed to the individuals who participated in interviews during my research in late 2008, including in particular several executive directors and senior members of staff in both institutions who were very generous with their time.

  3. I am guided here by the ideas put forward by Johnston (2001: 488) regarding the ‘social environment’ of IOs, and his central thesis that change in the behaviour of actors, including state actors, ‘may have a lot to do with socialisation’.

  4. The important influence of ‘bureaucratic culture’ on the adaptability of the IFIs was brought up on a number of occasions, unprompted, during interviews with both Bank and Fund staff. The interpretations put forward cohere with the accounts referred to above.

  5. I have developed the morphogenic model by drawing on the lessons learnt from the case study of the PRSP initiative, and as such it is best viewed as an ‘organising perspective’ that facilitates the exploration of complex issues and provides a basis for future refinement (Rhodes 1997: 5).

  6. It must also be noted that although he is often credited with pushing multilateral debt reduction forward, opposition to 100 per cent reduction was voiced by the Bank during Wolfensohn's presidency. The tension between debt relief and the Bank's ability to contribute to poverty reduction was perhaps felt particularly keenly by Wolfensohn, with his strong and very public support for both goals.

  7. See, for example, James Wolfensohn's welcoming of debt reduction through the HIPC initiative as being complementary to the Bank's developmental mission and ‘very good news for the poor of the world’ (1996).

  8. This point was also made during an interview by a World Bank country economist for one of the HIPCs, who discussed the promises of George W. Bush to reform IDA's operations so as to ‘not just drop the debt, but stop the debt’ (2001) in terms of their potentially fatal implications for IDA.

  9. Indeed, Fund publications on debt relief continue to treat this as an open question, yet to be adequately resolved by empirical research (e.g. Clements et al. 2008).

  10. The important contribution of James Wolfensohn (Bank President from 1995 to 2005) to the broadening the developmental agenda, particularly through his efforts to recruit staff from a wider range of academic and professional backgrounds, was noted by a number of senior World Bank members of staff during interviews.

  11. It has been suggested (e.g. Lazarus 2008) that the Fund's ‘participatory turn’ was an attempt to counteract its perceived legitimacy crisis in the late 1990s. While this may have been a contributing factor, I suggest that, because of its fit with the technocratic, evidenced-based culture of the Fund, the growing ‘political economy’ knowledge regarding the participation-ownership-implementation nexus is of deeper significance.

  12. The term ‘process condition’ is used by Frazer (2005: 318) to describe the participatory requirement within the PRSP initiative.

  13. In relation to the Fund see Article XXX1 Section C Paragraphs iv and vii, and in relation to the Bank Article IV Section 10.

  14. Through in particular the Governance and Anti-Corruption (GAC) agenda, the Bank seems to be proactively engaging civil society to support reform efforts. An interview with a Bank member of staff working on GAC shed an interesting light on the tension between GAC and the Bank's traditional apoliticism. When questioned on this issue, the interviewee responded that: ‘Some Country Directors hide behind the Articles of Agreement, but this [GAC] has support from the top’. Creditors’ recent establishment of a US$100 million Governance Partnership Facility to support GAC civil society outreach, and the creation of a monthly Governance Council that is chaired by the Bank President or a Vice-President, suggests that the Bank is in the process of becoming more involved in domestic governance reform. Though representing a challenge to its established apoliticism, the Bank justifies this shift in terms of its central mandate: ‘[The Bank's] focus on governance and anticorruption (GAC) follows from its mandate to reduce poverty — a capable and accountable state creates opportunities for poor people, provides better services, and improves development outcomes’ (World Bank 2007: 1).

  15. Broadly, resistance came because extended reduction was understood by both the Bank and Fund to be detrimental to their ability to pursue their central missions.

  16. It is conceivable that further interactions between creditors, the IFIs, and borrowers could lead to the elaboration of a tightly defined understanding of an issue requiring easily monitorable IFI actions, and so there is a route from the left- to the right-hand paths. However, neither of the looser aspects of the PRSP initiative that were examined followed this route.

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Clegg, L. In the loop: multilevel feedback and the politics of change at the IMF and World Bank. J Int Relat Dev 13, 59–84 (2010). https://doi.org/10.1057/jird.2009.28

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