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Lecture 10

Lecture 10b International Organizations II.doc

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Political Science
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Todd Alway

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Political Science 1G06 2013 II Lecture 10b International Organizations IMF - On one level, the International Monetary Fund has a degree of autonomy that most other international organizations lack - Specifically, in terms of its operational budget (although not its loan budget) the Fund is by and large self-funding - Having said this, the ability of the organization to exercise that autonomy is largely constrained by its most powerful members - 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 - 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) - Lends to states having a very low GDP/capita - The funds are provided either as outright grants, or as loans with no interest and a 35-40 year repayment period Autonomy: - The Bank has two main sources of independence: - A) Financial - Parts (but not all) of the Bank is self funding - B) Ideological power 1 - 10 000 staff: 7000 in Washington, 3000 elsewhere - It represents a large concentration of research ability and intellectual authority - 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 to the financial contribution that the state makes to the organization - The US has over 16% of the vote which gives it the ability to veto any major change to the Bank’s Articles of Agreement (since a constitutional change requires 85% approval) World Trade Organization: - The WTO is responsible for administering a number of separate agreements, all of which are designed to create a liberal free-trade international economy - Some of the more significant:
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