Does it take two to tango? How to improve cooperation between the IMF and the World Bank

Silvia Marchesi and Laura Sabani

No 232, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: Despite a series of official agreements aimed at strengthening Bank-Fund cooperation, it is widely believed that coordination between the two organizations often falls short of what should be rationally expected. A greater pressure for conformity, required by the need of coordination, may contrast with the objective of enhancing policy adaptation to the specific conditions revealed by each institution’s specialized expertise. In this paper we present a theoretical model which, focusing on the quality of information transmission between the IMF and the WB, analyzes the impact of different governance structures on the degree of Bank-Fund cooperation. We compare the performance of a “delegation-scheme” with that of a “centralization-scheme.” A centralized structure better addresses the necessity of coordinating policy actions but greater consistency between the Bank and the Fund policy actions will be achieved at the expenses of a less satisfactory adaptation to “local conditions.” When the need for coordination is relevant, as it is generally the case for the Bank and the Fund operations, we find that a centralized governance structure allows to achieve a level of overall payoff greater than those of a decentralized one.

Keywords: IMF and WB conditionality; coordination; communication (search for similar items in EconPapers)
JEL-codes: D83 F33 N2 (search for similar items in EconPapers)
Pages: 21
Date: 2013-02, Revised 2013-02
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repec.dems.unimib.it/repec/pdf/mibwpaper232.pdf First version, 2013 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:232

Access Statistics for this paper

More papers in Working Papers from University of Milano-Bicocca, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Matteo Pelagatti ().