Analyse the IMF and IR Theories Essay Example

end according to Neo-Realists, it is in the best interests of states to engage in the IMF because of the potential power it can build, the ability to persuade rather than coerce which consequently increases the relative amount of power a state can use to achieve its interests (Mingst, 2008). Therefore, the IMF is the means of neo-realist theory by basing international political decisions on the pursuit of national interests through power which is necessary to achieve the interests.

The IMF is an instrument of control for the advanced powers, so, providing development assistance means that the IMF can achieve favourable policies for the states that pursue political and economic ends in the name of development. How is this done you may wonder, well the weaker countries are granted economic assistance from the 'world' system and in exchange they must behave according to the norms of the system which have in turn been set by other states.

According to Blencowe (2008), the IMF has played a role in identifying the principles and aims for policy and the norms for behaviour, allowing the west to build a policy community that are favourable to those states interests which were in turn were influenced by the U. S. A. The development of the concepts of the Washington consensus (a set of neo-liberal policies designed by Washington based international financial institutions e. g.

IMF and World Bank) and neo-liberal economic policies began because of the pursuit of national interests by the U. S. A. The IMF and the World Bank became tools for the U. S. A. to pursue national interests as they donated large amounts of money for development to both

and in turn were able to establish neo-liberal policies as the policies of international development. Accordingly, the IMF acted and still acts in the political and economic interests of the U. S. A in international politics (Blencowe, 2008).

According to Mearsheimer (2007), in this way, international development assistance has replaced colonialism as the most efficient way to achieve transformational change of foreign states, cloaked in liberal economic concepts, motivation lies in neo-realist ontology, states are the main actors and the motivation is the states to create an effective method by which conditions are created in order to secure one's interest or according to Morgenthau the means to the development of power which is necessary to obtain one's interest in international affairs.

Thus, when considering neo-realism the IMF is another tool in the neo-realist toolbox of instruments of control in advancing one's interests (Mearsheimer, 2007) On the whole, the neo-realist conception of the IMF takes a state centric view, so the IMF is an instrument of control by the U. S. A. to maintain a liberal consensus and give the IMF no autonomy, making it exogenous and keeping the interests fixed in the favour of the advanced powers.

Therefore, the IMF is a great tool in advancing neo-realist aims, maximising power and security, as well as achieving interest satisfaction, through basing international political decisions on national interests and the power necessary to achieve them. Neo-Liberal Institutionalism and the IMF: According to Martin (2007), when analysing the IMF through neo-liberal institutionalism it is important to specify the fundamental strategic problems that the IMF addresses.

The IMF is an attempt by states to encourage beneficial exchange or cooperate and gain, however, international

cooperation is difficult as states fear other states will cheat or not fulfill obligations in the case of the IMF, this is because of anarchy and the fact that the states are the highest authorities. The main issue is that in order for states to cooperate they must surmount the collective action problems that they face. The fact that no external enforcement exists means that agreements must be self enforcing, so fear makes states create international organisations such as the IMF to overcome this problem.

This is an attempt to constrain states and limit the role that power politics can play. Increasing interdependence has also played a role in influencing states, states cannot get away from this influence easily so they have to transfer their power politics concerns to the more cooperative behaviour which is more profitable than being outside or disrupting the rules. So, the question for neo-liberals is how to structure the rules in order to promote cooperative behaviour.

Already we are a far cry from neo-realism and the idea that the powerful states exert influence over outcomes. The idea is not that the IMF is completely autonomous but instead the IMF has its own interests and that these interests will serve as a mechanism to combine the interests of multiple actors and therefore sustain cooperation (Martin, 2007) As an example, the IMF lends money to states but how can it make sure that these loans are being used responsibly? So, when lending to a state how can the IMF benefit both the borrower and the lender.

If State A has an economic problem similar to Greece (currency collapsing and payment deficits), how would the IMF

make sure that State A did not always behave recklessly and then take loans to patch up their mistakes. Neo-liberals suggest that the design of the IMF is the important factor and not that the money will be leant if its serves the interests of the U. S. A as neo-realist would. The fact that conditions are placed on loans allows the IMF certain autonomy in an attempt to force State A to adopt more responsible policies, just as we are seeing now with Greece and Spain enforcing austerity as a result of taking IMF loans.

The conditions placed on loans allow the IMF autonomy under certain conditions, hopefully with the outcome being that the provision of funding will be beneficial for both parties as opposed to neo-realist that would suggest a loan would be given if the powerful states favoured the state that needs a loan. According to neo-liberalism, institutions will smooth the progress of cooperation when it is in each states interests to do so, so, states cannot be forced to behave in a way which is contradictorily to its own interests.

Basically, the IMF is an attempt to overcome the restraints of international anarchy, which means that there is no trust and constant suspicion. Accordingly, if states share common interests and goals within an efficient functioning institution they will make no gain relative to other states but could gain in absolute terms because in an anarchical structure which is highly unpredictable it can be more damaging to not be part of the IMF. Constructivism and the IMF:

On the one hand material factors such as power and trade have influenced the formation of states and

their interests, according to neo-realism and neo-liberal institutionalism. On the other hand, constructivists hold that the interests and identities of states are a flexible product of a specific process. Constructivists will analyse the reigning discourse(s) in society as they believe that it shapes beliefs and interests and in turn determines the accepted norms of behaviour.

As a result, constructivists would hold that a states or group of states identities are not given a priori like neo-liberals and neo-realists but instead the identities are made up of reinforcing institutionalised norms, values and ideas that are present in the social environment. The IMF can be seen as a social structure that regulates and promotes the values of neo-liberal economic policy and a tool for international socialisation because identities, interests and the preference of actors are the products of the IMF.

A state will be granted a loan if it demonstrates that it shares the neo-liberal values and multilateral norms that the IMF requires in order to be eligible for a loan, if this is not the case then conditions will be placed on a loan that will try and guarantee that the neo-liberal values and multilateral norms are adopted and internalised. According to Fierke (2007), the focus of constructivism is placed on social facts of the world, they exist because all agree that they exist, they are the product of collectively held beliefs.

A collection of individuals will hold inter subjective understandings just like a collection of states would, these understanding will affect their behaviour and therefore the system which the will reflect their meanings of their behaviour. Following from this, ideas shape how actors perceive the world and the

way in which they perceive each other, so, these ideas will also affect interactions between actors. Ideas are given priority over material structures for constructivists as the meaning of the material structure is ultimately dependent on the ideas that give it meaning.

Whereas neo realists and liberalists would suggest that structures exist independently of how it is perceived by the actors, constructivists would argue that structures only exist as agents attach meanings to them and that these meanings originate from the ideas that actors hold (Fierke, 2007) In summary, structures exist but it is the agents that construct how they are understood, agents are very relevant given that in neo realist and liberalist views it is anarchy that orders the system.

Constructivists would hold that the structure that exists from anarchy is unpredictable prior to social interaction and that structure and agency are inter subjectively constituted structures of identities and interests and that the ideas in turn will mitigate states behaviour so if states identities and interests are produced as cooperative as is done by the IMF then state will behave in accordance and act cooperatively. Marxism and the IMF: The IMF is and was mainly funded by the U. S. A. to re-build the world economy after World War 2 and to prevent revolution, so it carried out a massive programme of aid and re-development.

This is why the IMF was founded, so that European countries could borrow money, however, now it is the 'underdeveloped' world that mainly borrows. Marxism attempts to provide a critical interpretation of capitalism, one that postulates that it is a historical product of social relations rather than a given because human nature

is not pre-determined to form social life in a capitalist manner, so, it is neither a tool to advance and control self-interest or to maximise security but instead it exists by the virtue of human relations and the way in which we have produced our social lives.

According to Rupert (2007), the IMF could be considered an agent in the debate between agent and structure, with Marx analysing it through the a process of dialectics. The IMF would be a social actor which is placed in the context of a structure, capitalism, the agent can act and contribute towards social change, but does the IMF do this? The Answer is no, instead the IMF is a disabling, exploitative, undemocratic and dominating.

The reasons for it being disabling are that the instead of being objective, necessary and natural the IMF is an historic element of social organisation based around capitalist values that are indeed subjective, optional and hardly natural. This means that for the capitalists their values presuppose what social productive powers are and what they should be used for, making it appear like the IMF is self-subsistent or an entity that would be there in any situation (Rupert, 2007)

The IMF is undemocratic and exploitative because of the manner in which they will grant loans. Countries receiving loans will have to agree to certain conditions normally Structural Adjustment Programs (SAPs). What entails is the debtor countries peoples not democratically deciding whether to take the loan or not but instead they will have to take the loan because the government dictates that they need to. The problem is that SAPs require the debtor country to deregulate and open their

economy and will have to cut subsidies as wells trade barriers.

It is exploitative in so far as to pay off the loans the IMF will demand that they privatise public assets and cut expenditure on welfare, meaning that most of the money given will in fact be returned at a much higher value not only in monetary value but also in the opportunities multi-national companies will have to expand their capitalist mode in that given country and these companies will often take the profits away from that country using it to its own advantage, therefore exploiting.

Finally, the formation of the IMF has led to a hegemony whereby a social vision has been expressed which claims to serve the interests of all, namely capitalism and the IMF is an instrument for defending capitalism and maintaining domination of the capitalist system where the U. S. A will benefit the most. Post-Structuralism and the IMF: Post-Structuralism (PS) is a world view that supposes that structures within society, so, social structures including economic, shape our own individual structures and behaviours, behaviour is structured by external influences.

What this means is that people are unconsciously constituted as subjects by the dominant social institutions and the prevalent discourses within society. Concepts are social products and are formed through the social and historical practice of human beings travelling through generations using in our case institutions. Individuals will work with them and others through social relations, however, what cannot be done is making the claim that your concept reflects what objectively exists independent of human experience which is what both neo-realists and neo-liberal institutionalists would hold.

According to Campbell (2007), when PS examines the IMF

three main elements are exposed the construction of identities, the dualistic nature of the IMF and the resulting relationship between power and knowledge. Identities are constructed by the amount of money that is donated by the states that are part of the IMF, the voting system is based on a quota system, this means that the more you contribute the more your vote is valued in terms of yes or no to a loan application (Campbell, 2007).

The issue here is that the wealthier countries will obviously have more of the vote as poorer countries cannot match their contributions. This leads to a states identity being constructed through the dominant or richer countries concept, money equals power or material capabilities so if you do not have these capabilities you need them to be considered developed or wealthy whereas wealth could be measured in happiness or health.

This attempt by the richer countries to claim objectivity by using money as a measure of development means that there understanding marginalises and excludes other states that do not have the capabilities and are therefore constructed to need to develop and take loans in order to develop. The fact that states can be eligible for loans tells us nothing about what meaning and significance the loans have. What they really mean is that your economy is not applying the dominant discourse of economics (Neo-liberal) as a result defines a states identity through the amount of money they have.

Obviously making richer states the claim that there method is better and exists independently as it could be applied anywhere and work, something which a post-structuralist would deny. This in turn leads to a

dualism of 'self' and 'other' within the IMF, self being wealth and other being poor or the terms of a loan the debtors (self) and the creditors(other), consequently this means that the self gains power within the IMF and the others are trying to get there.

The relationship between power and knowledge is obvious then, the powerful countries hold the knowledge that the other must gain, meaning that the wealthier countries establish their interpretations to maintain and support their position within the IMF and the global political stage. Post-Colonialism and the IMF: Post-Colonialism (PC) attempts to offer new insights about ways in which power can be used in order to constrain a state becoming what it wants to be.

Instead PC determines that states should make sense of the world in the same manner in which the colonisers do, truths based on forms of knowledge that are objective, real and universal. The issue here is that the objective, real, true, universal knowledge that is held by the dominant states is in fact helping to re-enforce the domination both politically and economically of the west. The IMF plays a key role in doing this, along with other financial institutions they have pushed a particular ideology of market fundamentalism.

The policies which they have implemented and the states that have chosen to implement these policies have let democracy be undermined as this ideology of market fundamentalism has not been a democratic decision but forced on states that have to borrow. The shear fact that rationalists have applied certain methods to allow them to reach 'truths' about themselves and others is an indication of self and othering on a universal scale

that the IMF supports through conditions on loans, so, 'free' market is the best market and ideas similar to that.

These ideas serve as a justification for imperialism and the underlying values that place value on claims of truth, such as privatisation is the best method for a state to develop economically which China obviously proves wrong to a point. The concepts and ides that are prevalent in society today such as capitalism and the free market are experienced differently by people all over the world meaning that it is not acceptable to take these western values and 'apply' or force them universally because the origins and their purpose are still questionable.

Colonial domination and capitalist exploitation are obvious and PC would ask that the world would be more democratic and inclusive of world views. In short the IMF is an institution of western values that tries to and has succeeded so far in universalising its values, the west's values and sets the rules of the game in favour of the dominant, the west.