Read my lips: The role of information transmission in multilateral reform design

Silvia Marchesi, Laura Sabani and Axel Dreher

Journal of International Economics, 2011, vol. 84, issue 1, 86-98

Abstract: Context-specific knowledge is crucial to crafting multilateral reform programs. Nonetheless local knowledge often consists of unverifiable information, thus the quality of countries' reports depends on the conflict of interests faced by the recipient and the multilateral. We compare the performance of a "delegation-scheme" against a "centralization-scheme." We find that recipients' discretion in the choice of reforms (delegation) should only be increased when the countries' local knowledge is strictly more important than the multilateral's information. Conversely, a reduction in the conflict of interests may lead the multilateral in to allowing the recipient less freedom in designing reforms (centralization). Our empirical results support these theoretical predictions.

Keywords: IMF; conditionality; Delegation; Communication; Ownership (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (27)

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Working Paper: Read my Lips: the Role of Information Transmission in multilateral reform design (2009)
Working Paper: Read my lips: the role of information transmission in multilateral reform design (2009)
Working Paper: Read my lips: The role of information transmission in multilateral reform design (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:84:y:2011:i:1:p:86-98

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