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International Financial Institutions

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The Role and Influence of International Financial Institutions Danny Leipziger


Development thinking has evolved from the early works of W. Arthur Lewis and Paul Rosenstein-Rodan and has been influenced by new and varied schools of thought. Emphases have shifted from capital accumulation and technical progress to human capital investment and social inclusion. Institutions have come into the equation, as has a prominent role for markets and for the state as drivers of development. Underlying these views were practicalities that shaped the way countries dealt with their need for foreign capital, the management of the macroeconomy, and their responses to economic and financial crises. There was a prominent role for the so-called Bretton Woods institutions, namely, the World Bank and the International Monetary Fund, in shaping prevailing views of development and putting them into practice. This

Danny Leipziger

The Role and Influence of IFIs

has been important, both directly and indirectly, in affecting policy choices made by developing country governments over past decades.

Keywords: Bretton Woods Institutions; World Bank ideology toward development; IMF ideology and development; changing development paradigms; international financial institutions; Bank-Fund Collaboration; Bank-Fund Concordat.

Chapter 49

Page 2

Danny Leipziger

The Role and Influence of IFIs


International financial institutions (IFIs) have strongly influenced development thinking and practice in recent decades. IFIs have exerted direct influence thorough the volume of their financial transfers, and indirectly, for example, through their impact on the resource transfers of others, including donors and the private sector. Even more important, IFI analysis and ideas have dominated aspects of development strategy and ideology. This chapter discusses the Bretton...

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