IMF and its Role in International Political Economy Essay

An example of the IMF’s ability to promote strong, stable economies is the case of Jordan. In the 1980s the declining oil prices and the related recessions in the Middle Eastern oil exporting countries was disadvantageous to Jordan. In 1989 Jordan had a 30-35 percent unemployment rate and was having a hard time due to their external debt. This led the authorities to request the country’s first arrangement with the IMF. Economic reforms were a part of the agreement between Jordan and the IMF. Jordan agreed to a series of five year reforms financed by the IMF, therefore the government took on huge reforms prioritizing foreign investment and easier trade policies. They were ultimately able to reduce the overall debt payment up to a manageable level. Jordan is currently regarded as a country by which the effectiveness of the IMF assistance is assessed.

Political- economy is a complex term, consist of politics and economy. So at first we have to know what politics is and what economy is before discussing political economy.

The International Monetary Fund (IMF) was created in the mid-1940s as a direct result of the chaos created by the individual central banks before and during the Great Depression. With the advent of economic globalization, it became clear that the uncoordinated policies of individual central banks was becoming a hindrance to global growth and financial stability. In December 1944, the IMF formally came into existence with 29 members, each agreeing to cooperate on the international stage to stabilize exchange rates and

By merely glancing at the political systems across the world, it becomes clear that politics and the economy are inextricably tied. Both are institutions that maintain some sort of balance between freedom and equality, and both are associated with a variety of ideologies regarding what the best balance is (O’Neil 2013, 101 & 112). We often see how politics and economics influence each other, with policy focusing on economic regulation, and a country’s economy reflecting how well the state can operate.

　　　　　　Politics and economy are conjoined; they cannot live without each other. Political and economic impact is a mutual role. The development of the economy provides a material basis and a real guarantee for political stability. Political unity for the economic development provides a good condition and foundation. But the political structure problems cannot be solved by the economy. Economic problems cannot be understood from the political side. The two are independent of the two

The study of how financial theory and its technicaleffect on political ideology is called political economy. Political economy is the communication in between economics and politics. It also refers how organizations establish in various system. Like as social and financial systems such as socialism, industrialism and communism. Political economy shows how public law is developed and carried out. It is most frequently describes interdisciplinary researches bring into play economics, government, law, history, sociology and other disciplines in discussing the important function of political consider figuring out financial results.

In an effort to bring an end to world poverty the World Bank and IMF (International Monetary Fund) were established in 1944. Consisting of members from 44 nations “The Bank and the IMF are twin intergovernmental pillars supporting the structure of the world's economic and financial order”(Driscoll, 1996). In other words they are international economic organizations that grant loans to third world countries for development programs.

participants in this conference created three organizations to help regulate the international economy. The first is the International Monetary Fund (IMF) which was established with the idea of regulating monetary policy. One of the benchmarks of the IMF is the stabilization of exchange rates and the loaning of money to help stabilize countries with balance of payments deficits. The second organization established was the General Agreement on Tariffs and Trade (GATT) whose main focus was on a liberal trading order.

The first locomotive aspect of contemporary globalization, offered by the IMF, is the movement of capital. The economies of nations have become increasingly interlinked due to the free flow of capital, and semi-unrestricted global trade via a reduction in protectionist measures (birdsall 2003). However, this movement of capital occurs in a highly asymmetric fashion across international borders. The post-colonial reality of countries of the Global South, which saw their resources plundered, has a profound effect on the ability of these countries to freely engage with and benefit from globalization in the same way as countries of the Global North. The wealth accumulated by highly industrialized nations from historical imperialism, has allowed them to produce a wealth of institutions which in-turn creates a reputation of stability and reliability for them. These institutions and reputation allow them to benefit

First, let us examine how economic policies like the structural adjustment policies implemented by the IMF affect a country. A great example of this is detailed in Ault and Sandberg’s “Our Policies, Their Consequences”, where both authors explore how seriously the structural adjustment policies changed the economic state in Zambia. As these authors point out, the terms of the loans “reflect the economic and political interests and values of the world’s wealthiest nations (470)”. It is seen here already that that does not bode well for Zambia. One clearly can see that globalization is just another way first world nations still colonize the world, but instead through means of economic and trade conquests. Now, the article continues on to talk about the kind of changes that the IMF implemented on Zambia: they wanted them to devalue their currency and stop supporting many domestic programs, social welfare programs, and fire federal employees and instead they wanted them to focus on increasing their exports for the global market. And what are changes without its consequences? Because the IMF favored the growth of international markets, the local economy in Zambia suffered greatly. Devalued

Political economy is the study of production and trade and their links with custom, government and law. It is the study and use of how economic theory and methods influence and develop different social and economic systems, such as capitalism, socialism and communism, and it analyzes how public policy is created and implemented. Since various individuals and groups have different interests in how a country or economy is to develop, political economy as a discipline is a complex field, covering a broad array of potentially competing interests (Investopedia).

The three major international economic institutions are the International Monetary Fund (IMF), the World Bank and the World Trade Organization; this book mainly focuses on the IMF and the World Bank, due to the author’s first-hand experience with both institutions. The IMF, a public institution built as a guiding hand for economic stability around the world, has brought false

Technical assistance and breeding which together the IMF calls capacity development are important benefits of IMF membership. Construction human being and institutional capacity within a country helps the government implement more effective insurance, leading to better economic outcomes. The IMF’s surveillance and lending work often helps identify expanse in which technical assistance and training can have the biggest shock. The IMF provides technical assistance in its areas of core expertise: macroeconomic insurance policy , tax policy and revenue administration, expenditure management, monetary policy, the commutation rate system , financial sector stability, legislative frameworks, and macroeconomic and financial Synonyms. The IMF relies on independent external and internal evaluations to assess the effectiveness of its technical assistance and training.

1.The international financial institutions (IFIs) are central pillars and the architects of the global economy. The world bank and IMF were founded and funded by the United states after the second world war to build shattered world economy after the war and great depression of the 1930s (socialist alternative,). The creation of the IFIs was to bring about a global economy after the “isolation economy” which some argue brought about the Second World War. The IFIs were to help the economy of the less developing countries (LDCs) to bring about growth and development, a phenomenon known as globalization.

The International Monetary Fund (IMF) was established in 1946, along with the World Bank. The IMF was developed to promote all monetary cooperation and remedy economic problems incurred during the post - war reconstruction period (Baylis; 2008: 245). The IMF was therefore considered as the “rule keeper” and an important component in public international management. In the pursuit to stabilise the exchange rate system, the IMF reserves the authority to change exchange rates. Another vital role is control over the balance of payments deficit of states and governing the policies which affect states monetary systems (Spero; 1990: 33). However, since the 1980 's, the IMF 's role has settled into the position of an institution providing assistance, based on financial situations, to developing countries. In order for countries to receive any assistance, the governments of those countries must agree to certain conditions set out by the IMF and the World Bank which permits the implementation of specific reforms provided by these institutions (Baylis; 2008: 245).