Reform Agenda at the International Financial Institutions
The speeches and congressional testimony in this section trace out in real time the progress the Bush Administration made in implementing a series of fundamental reforms at the international financial institutions—the International Monetary Fund, the World Bank, and the other development banks. They start with the Administration’s proposals, which were made at the start of the Administration. They then move on to report on the successful implementation and finally consider a series of next steps for the future.
Our reform agenda was based on the principle that economic growth is essential for reducing poverty and, in particular, that productivity growth comes from the private sector. The reform agenda included the proposal to move from loans to grants and the incorporation of a system of measurable results at the World Bank. It also included a new policy to clarify the limits on exception access to loans from the IMF and a requirement that the IMF focus on its core responsibilities in the macroeconomic and banking areas. (The collective action clauses reform, which was a reform to the international system rather than to these institutions, is described in another section.) As with many reforms, some of these were considered controversial at the start, and a considerable amount of financial diplomacy was required to get international agreement. Once implemented, however, they bolstered the case for increased funding for the institutions from Congress, and indeed for the first time in many years the Congressional funding for IDA, the window for the poorest countries at the World Bank, increased.
The first three items describe the Administration’s original reform proposals for the IMF and the multilateral development banks and need little additional explanation. Item 4 requires a bit of background to understand: this is congressional testimony proposing an approach to reform the North American Development Bank a joint United States-Mexico institution designed to fund water projects on the border. NADBANK, as it is called, was originally created to get needed political support for NAFTA in the early 1990s, but it never performed very well. After much work we were eventually able to get the needed reform legislation passed to implement these reforms.
Item 5 gave our support and encouragement to the staff and leadership of the World Bank as it began to implement the measurable results component of the reforms. In item 6 we began to make the case for increased congressional support based on our reform proposals. Item 7 stresses our general theme of the private sector as a source of growth and poverty reduction.
By the time the speeches and testimony in items 8 and 9 were given, we had already made serious progress in the gaining international agreement and indeed implementation of the proposals. These speeches describe that progress. In item 10 I then make the case to the House Foreign Operations Appropriations Subcommittee for additional funding based on this successful implementation; during the testimony I referred extensively to several trips I made to Africa to observe the grants and measurable results first hand.
In item 11, a presentation at the American Enterprise Institute, I endeavored to present our analytical rationale for the reforms as a whole (an earlier attempt at this was made in my paper for Guillermo Calvo’s festschrift conference (Item 7). In item 12 I reported to Senator Lugar’s committee how our measurable results agenda was an important weapon in the fight against corruption at the institutions. Finally, the last two items build on our success by suggesting additional reforms. In item 13 I described a new non-borrowing program at the IMF, which I am pleased to say was approved by the G7 in April of this year, and a proposal to completely cancel the debt of the heavily indebted poor countries to the World Bank and the African Development Fund. Item 14 was an endeavor to continue to spread the word about the importance of measurable results, this time in a small Davos audience that included Jeffrey Sachs and Angelina Jolie.
the Bretton Woods Financial Institutions, Bankers
Association for Finance and Trade,
and Sovereign Debt Reconstructing, Joint Economic Committee,
the Regional Development Banks, Institute for International
Economics and Center for Global Development,
States and Mexico Economic Relations NADBANK Reform), Subcommittee
Measuring, Monitoring, and Managing for Development Results, World
for the Multilateral Development Banks, Subcommittee on
International Economic Policy, Export, and Trade Promotion of the Senate
Committee on Foreign Relations,
New Business Models at the Multilateral Development Banks,
8. Policy Regime Change and the International Finance Institutions, International Monetary Fund, Washington , DC , April 16, 2004
Bush Administration's Reform Agenda at
the Bretton Woods Institutions: A Progress Report and
Next Steps, Senate Committee on Banking, Housing, and Urban
Request for Treasury International Programs for Fiscal Year 2005, Subcommittee
on Foreign Operations, Export Financing, and Related Programs of the House
11. New Directions for the International Financial Institutions, American Enterprise Institute, Washington, D.C., June 10, 2004
Multilateral Development Banks and the Fight Against
Corruption, Testimony before the Senate Foreign Relations
Reforms that Drop and Stop the Debt of Heavily Indebted Poor Countries,
Remarks at the Poverty and Debt Relief Photo Exhibit,
on Getting the Millennium Development Goals Back on Track, Remarks at the World Economic