Portal de Periódicos da CAPES

Seeing Like the IMF on Capital Account Liberalisation

2011; Taylor & Francis; Volume: 17; Issue: 1 Linguagem: Inglês

10.1080/13563467.2011.569021

1469-9923

Manuela Moschella,

Global Financial Regulation and Crises

Abstract This article explores the ideational dynamics that shaped the International Monetary Fund's (IMF) campaign to establish capital mobility as a formal obligation of IMF membership during the 1990s. First, the article examines how the IMF made the issue of capital account liberalisation 'legible' through constructing a particular 'legibility map' on capital mobility, which was rigorously promoted across its membership. Second, the article explores the processes through which the IMF's legibility map on capital mobility was accepted by the organisation's member states. The article traces debates within the IMF Executive Board relating to the decision to amend the IMF's Articles of Agreement to give the organisation a formal mandate and jurisdiction over capital account liberalisation to complement its existing mandate and jurisdiction over current account transactions. By tracing the negotiations on this amendment proposal, the article illustrates how the IMF used the ambiguities inherent within its cognitive map on capital account liberalisation to persuade member countries of the need to amend its Articles of Agreement. In the wake of the Asian crisis, however, the persuasiveness of the IMF's policy preferences on capital mobility quickly declined in tandem with a broader deterioration in the organisation's cognitive authority in the world economy. Keywords: IMFcapital account liberalisationambiguitypolicy consensus Notes Examples of these different positions can be found in Greenspan Citation(1998), Bhagwati Citation(1998), and Stiglitz Citation(2000). For a thorough discussion on the benefits and costs of financial liberalization, see, for instance, Caprio et al. Citation(2006) and Fischer (1998). Originally confined to surveillance over members' exchange-rate policies, the scope and modalities of surveillance have changed over time. Today, Article IV consultations generally cover not only exchange-rate policies, but also a broad range of macroeconomic and structural policies. For an analysis on IMF staff's recruitment policies and organizational culture see Momani (2005, 2007). For the most recent developments in the IMF's thinking on capital account liberalisation see Grabel (2010) and Moschella (2010b). Article VIII establishes an obligation for member countries to remove controls on the making of payments ad transfers for current account transactions. Once a member has accepted this general obligation, it is not allowed to maintain or introduce new restrictions without the approval of the Fund. About the 'constructive role' of ambiguity in shaping political outcomes in the realm of global finance, see Best Citation2005). IMF Archives SM/95/164. Economic growth refers here to a rise in real GDP. IMF Archives SM/95/164: 8–10. For more details on Fund's treatment in its surveillance activity, see also IMF Archives SM/95/164 Supplement 1 and SM/97/32 Supplement 1. IMF Archives SM/95/164: 7–9, 17. IMF Archives SM/94/202: 20. IMF Archives SM/97/32: 6. IMF Archives SM/94/202: 25. IMF Archives MD/Sp/98/5. For instance, the staff memoranda prepared in 1997 suggested alternative courses of actions rather a definitive list of criteria. See, among others, IMF Archives SM/97/89 and IMF Archives SM/97/173. IMF Archives SM/97/32: 25. IMF Archives SM/95/164: 4. The first operational guidance to the staff in the area of capital convertibility were issued in December 1995. IMF Archives SM/97/173: 23. Several accounts have convincingly shown that IMF management and staff pushed the amendment into the IMF agenda. See, for instance, Abdelal Citation(2007) and Leiteritz Citation(2005). See, for instance, the reservations raised by EDs in the following meetings. IMF Archives EBM/97/38, IMF Archives EBM/97/66, and IMF Archives EBM/97/87. See, for instance, IMF Archives SM/97/86 and IMF Archives SM/97/146. IMF Archives EBM/97/38: 31. See also the statement prior to the meeting and the concluding remarks of the Chairman in IMF Archives EBM/97/66. Author's interviews with IMF officials. IMF, March–June 2006. IMF Archives EBM/97/93. Nicolas Eyzaguirre, Alternate Director, Chile (Argentina, Bolivia, Paraguay, Peru, and Uruguay): 7. IMF Archives EBM/97/38. Gus O'Donnel, UK Executive Director: 5. IMF Archives EBM/97/38. Benny Andersen, Alternate Director, Denmark (Estonia, Finland, Iceland, Latvia, Lithuania, Norway, and Sweden): 21. IMF Archives EBM/97/38. Sulaiman M. Al-Turki, Executive Director, Saudi Arabia: 24–5; Dinah Z. Guti, Executive Director, Zimbabwe (Angola, Botswana, Burundi, Eritrea, Gambia, Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia, Nigeria, Sierra Leone, South Africa, Swaziland, Tanzania Uganda, and Zambia): 28; A. Shakour Shalaan, Executive Director, Egypt (Bahrain, Iraq, Jordan, Kuwait, Lebanon, Libya, Maldives, Oman, Qatar, Syrian Arab Republic, United Arab Emirates, and Yemen): 28. IMF Archives EBM/98/38. Milleron, French Executive Director: 20; Alexandre Kafka, Executive Director, Brazil (Colombia, Dominican Republic, Ecuador, Guiana, Haiti, Panama, Suriname, Trinidad, and Tobago): 25. IMF Archives EBM/98/103. Gregory Taylor, Executive Director, Australia (Kiribati, Korea, Marshall Islands, Mongolia, New Zealand, Papua New Guinea, and Philippines): 12. IMF Archives EBM/98/38. Gregory Taylor: 27. IMF Archives EBM/98/38. A. Barro Chambrier, Alternate Director, Gabon (Benin, Burkina Faso, Cameroon, Cape Verde, Central Africa Republic, Chad, Comoros, Congo, Cote d'Ivoire, Djibouti, Equatorial Guinea, Guinea, Guinea-Bissau, Madagascar, Mali, Mauritania, Mauritius, Niger, Rwanda, Sao Tome and Principe, Senegal, and Togo): 27. IMF Archives EBM/98/38. Gregory Taylor: 28; Alexandre Kafka: 25. IMF Archives EBM/98/38. M. R. Sivaraman, Executive Director, India (Bangladesh, Bhutan, and Sri Lanka): 9; See also X. Dinah and Z. Guti, Executive Director, Zimbabwe: 29. IMF Archives SM/98/172; also IMF Archives SM/98/187. The Interim Committee is the advisory body to the Board of Governors – that is, the highest decision-making body of the IMF, which normally meets once a year and where each member country is represented. In September 1999, the Interim Committee has been replaced by the International Monetary and Financial Committee (IMFC). IMF Archives EBM/98/103. Bernd Esdar, Executive Director, Germany: 11; Jon Shields, Executive Director, UK: 10; Karen Lissakers, Executive Director, USA: 14. IMF Archives EBM/98/38. Nicolas Eyzaguirre, Alternate Director, Chile: 12. IMF Archives EBM/98/103. Nicolas Eyzaguirre: 10. IMF Archives EBM/98/103. Yoshimura, Japanese Executive Director: 14. See, for instance, the statements from the IMF Managing Director in IMF Archives EBM/98/38: 9.