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Lecture 14

CLASSICS 1M03 Lecture 14: Political Science 1AB3 2017 Lecture 11b International Organizations overhead

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Claude Eilers

Political Science 1AB3 2017 Lecture 11b International Organizations - International Monetary Fund - Provides loans to states experiencing balance of payments problems - There are two elements that provide the International Monetary Fund with a degree of autonomy - A) In terms of its operational budget (although not its loan budget) the Fund is by and large self-funding - B) It is also a significant source of ideas on financial stability (recall our discussion of Constructivism) - Having said this, the ability of the organization to exercise that autonomy is largely constrained by its most powerful member states - Unequal voting rights - Decisions in the IMF are not made on the basis of one state one vote (as is the case in the UN General Assembly) - They are made on a weighted basis o Weighted according to a state’s financial contribution to the organization - The net effect is that certain economically powerful states have a far greater percentage of the total votes than others - The United States, since it has contributed the most to the fund, has close to 17% of the total voting power in the organization - Moreover, since a certain category of IMF decisions requires the approval of 85% of the total votes, the US has the power to veto actions by the Fund in certain circumstances World Bank: - The Bank is actually a composite of 5 separate organizations, two of which are most significant: - A) International Bank for Reconstruction and Development (IBRD) - The IBRD provides loans to “credit worthy” middle-income member states for specific development projects - These loans must be repaid with interest 1 - However, they are provided on more advantageous financial terms than the borrower government would be able to get from private sources - B) International Development Association (IDA) - The IDA lends to states that have a very low GDP/capita - The funds are provided either as outright grants, or as loans with no (or very low) interest Autonomy: - The Bank has two main sources of independence: - A) Financial - Parts (but not all) of the Bank is self-funding in its organizational budget - B) Ideological - The Bank constitutes a key node of research and intellectual authority - 10 000 staff: 7000 in Washington, 3000 elsewhere - It is able to (in part) define what development is, what types of policies are required to grow economically (recall our discussion of Constructivism) - However, the Bank is constrained/guided by the power of its largest member states - Like the IMF, votes are weighted according
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