Does it Take Two to Tango? How to Improve Cooperation Between the IMF and the World Bank

21 Pages Posted: 9 Jul 2013

See all articles by Silvia Marchesi

Silvia Marchesi

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS); Università degli Studi di Milano-Bicocca - Center for European Studies (CefES); University of Milan - Centro Studi Luca d'Agliano (LdA)

Laura Sabani

University of Florence

Date Written: September 2012

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. 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 in general 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

JEL Classification: D83, F33, N2

Suggested Citation

Marchesi, Silvia and Sabani, Laura, Does it Take Two to Tango? How to Improve Cooperation Between the IMF and the World Bank (September 2012). University of Milan Bicocca Department of Economics, Management and Statistics Working Paper No. 232, Available at SSRN: https://ssrn.com/abstract=2291268 or http://dx.doi.org/10.2139/ssrn.2291268

Silvia Marchesi (Contact Author)

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy
+39 02 64483057 (Phone)

HOME PAGE: http://https://sites.google.com/site/ssilviamarchesi/home

Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

University of Milan - Centro Studi Luca d'Agliano (LdA)

Via P. Amedeo 34
Milano, Mi 20122
Italy

Laura Sabani

University of Florence ( email )

Piazza di San Marco, 4
Florence, 50121
Italy

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
46
Abstract Views
596
PlumX Metrics