IMF, which wishes to loan large amounts of money, that causes conditions not to
be enforced and undermines programs (Vaubel 1986 ). Randall Stone ( 2004 ),
however, has recently presented persuasive evidence that the fundamental problem
is the reverse: that the Fund’s principals frequently intervene to promote leniency
toward favored states. This persistent inXuence of political pressures means that the
conditions the IMF so painstakingly negotiates are rarely imposed with any
consistency or credibility. Thus, the problem with IMF programs is not that they
are poorly designed or based on an inappropriate economic ideology. It is that even
well-designed programs are not enforced. Thus, just as in the case of trade, weWnd
that the struggle between political inXuence and rule-based behavior deWnes the
impact of the IFIs on the world economy.
4 Conclusion
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The new global economy is highly institutionalized. Understanding this phenom-
enon has led to the development of a vibrantWeld of political science centered on
the study of international institutions and IOs. ThisWeld continues to hold to a
primarily contractual view that sees institutions as solutions to collective action
problems. Thus, the study of IEIs begins by identifying the underlying strategic
problems that IEIs address. In the case of trade institutions, these problems involve
overcoming obstacles to bargaining, monitoring compliance with commitments,
and enforcing agreements. In the IFIs, the fundamental problem is to provideXows
of needed capital while avoiding moral hazard problems. This tension sets up the
IFIs as agents of their state principals who frequently have conXicting interests.
Thus, the contractual approach with its emphasis on principals and agents has been
a powerful tool for studying IEIs. New perspectives are beginning to emerge, as
noted in this chapter, with a focus on socialization, legitimacy, and accountability.
However, they are not yet developed to the degree that they present a fundamental
challenge to the contractual approach.
The study of the IEIs consistently shows that their dynamics, design, and eVects
reXect an ongoing struggle between the exercise of power and the rule of law. While
some authorsWnd more evidence for the weight of one side in this battle than the
other, careful empirical research reveals that neither side triumphs. The IEIs will
continue to have a major inXuence on the global creation and distribution of wealth.
Those studying them need to push further to understand the sources of their speciWc
design features and to move toward more conditional, precise statements of their
eVects. However, the analytical frameworks so far developed have proven insightful
and appear to provide a strong foundation for this research agenda.
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