The book by Ngaire Woods is about the IMF, the World Bank and their relationship with international political powers, economists, and borrowing governments working with them. The IMF and the World Bank are so-called globalizers, created to help balance growth in the global economy and trade. However, they provoked several crises in the developing countries and had to constantly change the strategy to become more efficient. The book fully describes how the IMF and the World Bank operate and gives an insight into their successes, failures, and objectives.
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To begin with, Woods provided readers with a detailed research of the methods of operating of the IMF and the World Bank. Woods suggests that by working together with these organizations, governments will achieve their development objectives. Although Woods does not state that it is the USA and other major shareholders who determine the policy of the IMF and the World Bank, she admits that the boundaries of their work are set by those shareholders. At the same time, in her book, Woods states that the main goal of the cooperation between these actors was to increase the amount of foreign investments and get rid of limitations in trade. In this regard, the most efficient strategies elaborated by professional economists were implemented by other countries and became the part of their policies. Thus, some critics are not sure in the efficiency of these approaches calling economists who created these “third-rank students from first-rate universities” (Woods, 2006, p. 2); however, Wood does not doubt it.
Furthermore, Woods presents a constructive analysis of the roles of the IMF and the World Bank and evaluates their performance. She highlights three main powers that drive the institutions: goals and interests of powerful countries; their own organizational motives; opportunities of the officials from the borrowing countries. Also, Woods’ research improves with the help of extensive interviews that she took in different countries. The participants held high posts, and conversations with them revealed “secret negotiations and assistance” between governments and the IMF and the World Bank (Woods, 2006, p. 84). However, it follows from the interviews that they could not “patronize officials” (Woods, 2006, p. 87). Hence, the picture provided by Woods sounds persuasive, as it is evidence-based.
Finally, Woods analyzed thoroughly the work of the IMF and the World Bank in Russia, Mexico, and Sub-Saharan Africa. Based on the analysis of the failures of these projects she suggests a plan of reforms that could enhance the efficiency of work of both institutions and help them with carrying out initial missions of crisis management and development of the poorest regions. The final chapter states the necessity of changing the objectives, methods, structure and governance of both organizations. It is noteworthy that by suggesting the reform, Woods stressed that both institutions should do it “not as the handmaidens of globalization, but as the stabilizers and insulators of an increasingly volatile and risk-prone international economy” (Woods, 2006, p. 213).
On the other hand, Woods avoided the massive public criticism targeted at the IMF and the World Bank. They were initially supposed to soften the adverse effects of capitalism on the global economy and contribute to setting certain standards of living that would stimulate the economy. Nevertheless, a series of financial crises occurred, and the following collapses in Russia and Eastern Europe caused severe debates over the missions of the IMF and the World Bank. Many criticized them as “tools of US imperialism” (Woods, 2006, p. 1), but Woods seems to intentionally grade this aspect. She does not question the way and the means of modern global governance, and thus, her position remains open to debate.
Moreover, Woods underestimates the influence of powerful individuals working for the IMF and the World Bank. She sticks to the point that groupthink dominates over innovative problem solving, but fails to admit the obvious impact of some leaders. Therefore, the aspect of internal authority in the IMF and the World Bank and their relations are not fully covered.
While comparing Woods’ work with an article by Fleck and Kilby (2006), some common themes can be noted. The research about US bilateral aid revealed several aid allocation criteria: development concerns, commercial and strategic importance, and democratization (Fleck & Kilby, 2006). These criteria mostly coincide with those that are the main drivers in the IMF and the World Bank. It can be argued that article covers only US aid allocations, and the IMF and the World Bank are international institutions, so they do not correlate. However, Woods and other critics admit the influence of the interests of the USA on both organizations. Also, a positive link was found between US bilateral aid and the World Bank lending and mentioned in the article.
The authors state that the patterns reversal in 1990 resulted in alteration of the tendency “so that the link with other bilateral aid programs is negative and the link with US bilateral aid and World Bank lending is positive” (Fleck & Kilby, 2006, p. 223). The World Bank provides lending operations based on similar principles as US bilateral aid, and their cooperation on some projects is inevitable as it improves the efficiency of aid allocation. Finally, the article provides another type of research, as it includes quantitative methods, such as statistical analysis of data sets on 119 countries from 1960 to 1997, and empirical analysis of unbalanced annual country-level panel that is related to the above-mentioned period of time..
To sum up, Woods managed to write a comprehensive and well-balanced work that illustrates the work of the IMF and the World Bank in detail. “The Globalizers” is a representative insight into the processes that determine the global economy from the perspective of two influential institutions. Woods explained these complex operations with numerous examples, cases, and interviews, and thus, created a clear, impressive picture.
Fleck, R. K., & Kilby, C. (2006). How do political changes influence US bilateral aid allocations? Evidence from panel data. Review of Development Economic, 10(2), 210-223.
Woods, N. (2006). The Globalizers: The IMF, the World Bank, and their borrowers. Ithaca, NY: Cornell University Press.