E-BOOK: STUDY GUIDE—IN PROGRESS

 

Part One: 1  How the Concept of Development Got Started

 

§         Identify and elaborate upon the (many) components of the concept of development (e.g., progress, nation-state, etc.), providing examples from the text as illustration.

 

Part One: 2  The Functions of the IMF and the World Bank

 

§         Describe the conditions of the international economy prior to the establishment of the IMF and the World Bank (Bretton Woods Institutions).

 

§         What was the objective of the gold-standard system and how was it supposed to work?  How successful was it?

 

§         What were the objectives of the founders of the Bretton Woods Institutions?

 

§         During the negotiations over the creation of the IMF, what were the major differences between Keynes’s position (UK) and that of White (US)?

 

§         What was a principal debate regarding the establishment of the World Bank?

 

§         What are the purposes of the IMF as articulated in its Articles of Agreement?

 

§         How was the Bretton Woods fixed exchange rate system designed to work before its collapse?

 

§         Describe the IMF’s lending facilities and conditionality.

 

§         Describe IMF surveillance.

 

§         How does the IMF’s charter promote “convertibility”?

 

§         How does the IMF seek compliance with its rules and policies?

 

§         How are the IMF and the World Bank both similar and different?

 

§         Describe the evolution of the World Bank’s lending.

 

§         What is the HIPC Debt Initiative?

 

§         What are the IFC, MIGA and ICSID?

 

Part One: 3  Competing Theories of Economic Development

 

§         What is the focus of development economics?

 

§         What structural impediments did developing countries face according to structuralist economists?

 

§         What did the structuralists mean by an “enclave economy”?

 

§         What was the thrust of “import substitution” and did it work?

 

§         How were the linear-stages-of-growth models of development, such as Rostow’s stages-of-growth model, similar to and different from the structuralist model of development?

 

§         What were the weaknesses of Rostow’s model of development?

 

§         How did the neo-Marxist view of development broaden upon orthodox Marxist doctrine and what were its weaknesses?

 

§         What was the principal critique advanced by the neo-classical development model?

 

Part One: 4  The 1960s and 1970s:  The World Bank Attacks Poverty; Developing Countries Attack the IMF

 

§         How did decolonization affect the World Bank’s lending?

 

§         What was the nature and purpose of the World Bank’s project lending to developing countries?

 

§         What were the consequences of the post-colonial push for economic growth?

 

§         What happened to the World Bank’s lending under the leadership of Robert McNamara and why?

 

§         How was World Bank lending under McNamara flawed?

 

§         Describe the NIEO movement.  Was it successful?

 

Part One: 5  The 1980’s:  The Debt Crisis and the Lost Decade

 

§         What gave rise to the debt crisis of the 1980’s?

 

§         Describe the “muddling through” approach to resolving the debt crisis.

 

§         What was the Baker Plan and how successful was it?

 

§         How did the Brady Plan differ from the Baker Plan?

 

§         Describe the nature and purpose of IMF stabilization measures.

 

§         Describe the nature and purpose of World Bank structural adjustment measures.

 

§         What was the impact of the debt crisis on social welfare?

 

§         What was the impact of stabilization and structural adjustment programs?

 

Part Two: 1  Development in the 1990s

 

§         Describe the market-friendly approach to development of the 1990’s.

 

§         Describe “growth with marginalization.”

 

§         Describe the concept of social development.

 

Part Two: 2  50th Anniversary of the World Bank and the IMF Prompts Criticisms

 

§         What were the criticisms of the World Bank and the environment in the 1990’s?

 

§         Describe the criticisms of the World Bank and human rights in the 1990’s.

 

§         What did critics in the 1990’s say about the World Bank and IMF and statist development?

 

Part Two: 3  The IMF and the World Bank Respond to Criticisms

 

§         How did the IMF respond to the criticisms of the institution?

 

§         How does the IMF charter limit conditionality?

 

§         What did the World Bank focus on after the debt crisis of the 1980’s had subsided?

 

§         How did World Bank conditionality address poverty alleviation?

 

§         How did the World Bank respond to criticisms of its operations and procedures?

 

§         In what way does the World Bank charter limit what the Bank can do in member countries?

 

Part Two: 4  Participatory Development & NGOs:  A Look at the World Bank

 

§         What is an NGO?

 

§         What kind of legal recognition is given to NGOs?

 

§         What are the principal functions of NGOs?

 

§         Describe the evolution of the relationship between the World Bank and NGOs.

 

§         What is the World Bank Inspection Panel and how does it operate?

 

§         What impact have NGOs had on development policy?

 

§         Describe the criticisms of NGOs and their activities.

 

Part Two: 5  Good Governance and Transparency:  Their Impact on Development

 

§         What aspects of “governance” are within the World Bank’s mandate?

 

§         How has the IMF approached “good governance”?

 

§         How has the World Bank defined “corruption”?

 

§         How did colonialism in Africa lead to post-independence corruption?

 

§         How did colonialism in Latin America lead to corruption?

 

§         How does bribery illustrate corruption?

 

§         What conditions in a country typically give rise to corruption?

 

§         What are the negative aspects of corruption?

 

§         How is the World Bank addressing corruption?

 

§         How is the IMF addressing corruption?

 

§         What criticisms have been made of the IMF’s and World Bank’s anti-corruption efforts?

 

§         What are the limitations on the IMF’s and World Bank’s anti-corruption efforts and how can they be improved?

 

Part Three: 1  What Does Globalization Mean?

 

§         What factors typically contribute to globalization?

 

§         How does Brazil’s development exemplify globalization?

 

§         What has been the IMF’s view of globalization?

 

§         What are the advantages and disadvantages of globalization?

 

§         How is globalization occurring in international finance and trade?

 

Part Three: 2  International Capital Markets & Their Importance

 

§         What are two major capital markets?

 

§         Why are capital markets efficient?

 

§         Provide an example of indirect finance.

 

§         How might savers and borrowers be affected by the lack of capital markets?

 

§         What is the difference between primary and secondary capital markets?

 

§         Describe the differences between equity and debt securities.

 

§         Give examples of transactions that occur in the international capital markets.

 

§         What is the point of portfolio diversification and how does that concept relate to international capital markets?

 

§         Who are the principal actors in the international capital markets?

 

§         What has contributed to the globalization of capital markets?

 

§         Why are global capital markets important to development?

 

§         Describe the private sources of capital.

 

§         Describe the public sources of capital.

 

§         Describe the role that private capital played in developing countries in the 1990s.

 

Part Three: 3  Development, the IMF & Institutional Investors:  The Mexican Financial Crisis

 

§         Describe how the IMF fulfilled its original mandate.

 

§         Did the original IMF Articles of Agreement treat the current account and the capital account differently? 

 

§         Describe the collapse of the par value system.

 

§         How did the collapse of the par value system affect the IMF’s role in the international monetary system?

 

§         What affect did the debt crisis of the 1980s have on the IMF?

 

§         How did the collapse of the Soviet Union affect the IMF’s operations?

 

§         Describe the impact of institutional investors on the private international capital markets in the 1990s.

 

§          Describe the types of institutional investors.

 

§         What concerns have given rise to institutional investors?

 

§         Explain how decisions by large institutional investors might create problems for developing countries.

 

§         What developments in Mexico gave rise to increased portfolio investment in that country?

 

§         What happened to Mexico’s current account in the early 1990s?  How was the capital account relevant under those circumstances?

 

§         How did the dramatic influx of foreign capital affect (i) Mexico’s ability to maintain the peso’s peg to the dollar and (ii) its foreign currency reserves?

 

§         What other events (e.g., political) placed additional downward pressure on the peso and cause further losses in foreign currency reserves?

 

§         How might foreign institutional investors have influenced the Mexican government’s financial policies prior to devaluation?

 

§         Describe the devaluation in 1994 and Mexico’s dependence on capital of foreign institutional investors.

 

§         Describe the rescue package put together to save Mexico from financial ruin.  What were its main purposes?  Its drawbacks?

 

§         How did the crisis affect the IMF’s operations?

 

Part Three: 4  The Promises and Perils of Globalization:  The Asian Financial Crisis

 

§         Why might financial globalization be advantageous to borrowers?

 

§         What is meant by a “world class company”?  Why is that label important in the international capital markets?

 

§         Why might developing countries resist financial globalization?

 

§         How did financial globalization lead to Asia’s remarkable economic performance before the financial crisis?

 

§         Why did many Asian countries use pegged or fixed exchange rates?

 

§         How might a central bank’s foreign reserves be important to the country’s exchange rate?

 

§         What factors led to the financial crisis?

 

§         Describe the main aspects of Thailand’s financial crisis.

 

§         What circumstances were conducive to a spreading of the financial crisis beyond Thailand?

 

§         Describe the spread of the crisis to the Philippines, Malaysia and Indonesia.

 

§          What led to the Korean financial crisis?

 

§         Describe the major aspects of the rescue effort.

 

§         What were Korea’s and the IMF’s initial response to Korea’s financial crisis?  What was the investors’ reaction?

 

§         Describe the rescue package put together to combat Korea’s financial crisis.

 

§         What was Korea obligated to do in exchange for IMF assistance?

 

§         Describe the problems associated with Korea’s short-term debt and how those problems were resolved.

 

§         Describe the Asian financial crisis’s impact on development.

 

Part Three: 5  Coping with Private Capital Markets

 

§         Describe the elements of the IMF’s “good governance” approach to preventing financial crises.  What is the essence of the approach?

 

§         What challenges would an emerging economy or developing country face when implementing “good governance” reforms?

 

§         What steps did the IMF take to improve its effectiveness in a financial world dominated by private capital?

 

§         How might the adoption of more flexible exchange rates by emerging economies or developing countries help prevent a financial crisis?

 

§         Why did some believe that a “currency board” would help prevent a financial crisis?  Are there any drawbacks to adopting a currency board?

 

§         What is the “Tobin tax” and what is its purpose?  What might be some of the proposal’s drawbacks?

 

§         What did Chile do to reduce the negative effects of “hot money”?

 

§         What is the purpose of encouraging “relational investors”?

 

§         What did Malaysia do to prevent speculative activity?  Did it work?

 

§         Why did the IMF propose amending its Articles of Agreement (its charter)?

 

§         Why did some observers call for the abolishment of the IMF?  What was the IMF’s reaction?

 

§         What was George Soros’s proposal?

 

§         Why did some believe that it would be beneficial for a financial crisis to play itself out without any intervention by the IMF?  What might have been a weakness of this viewpoint?