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Bretton Woods Basic. What they were designed to do. Emergency financing Exchange rate policy Trade liberalization Employment. What they actually do. Crisis management Transition Assist the poorest. What shapes their work. The politics of their main creditors Economics profession
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What they were designed to do • Emergency financing • Exchange rate policy • Trade liberalization • Employment
What they actually do • Crisis management • Transition • Assist the poorest
What shapes their work • The politics of their main creditors • Economics profession • Own bureaucratic imperatives • The politics of and the availability of sympathetic interlocutors in their borrowers
Similarities • Dominated by G7 via board structure • Conditional lending • Similar training for senior staff • Mission creep • Staff incentives to play conformist and technocratic
Where does the IMF money come from? • Members’ quotas • The burden for the quadrupling of its spending since 1991 falls on borrowers
Where does the WB money come from? • Mostly AAA bonds backed by rich members’ callable capital • Profits of investment of its own income from lending • Less and less: donations from rich members for IDA
Less talked about stuff • WB’s IDA and US politics • Trust funds and US politics • Congress vs Treasury: the Meltzer Commission
Who is “the US” • White House • Treasury • USAID-State Dept • National Security Council • Dept of Agriculture • American investors in sovereign bonds • American manufacturing
Question • How can poor states best deal with IMF/WB?