International Political Economy IMF Aid Effectiveness Analysis

IMF has played a very important role in international financial systemfrom it establishment. As an international financial institution basedon the new order after the second world war, IMF plays an administer roleof international financial system, and its influence has been extendedto the world economy, politics and safety area.From1980s, developed countries’ economy speed decreased, thosedeveloping countries whose important industries were export processingindustry lost big market, fall in inflation. Under this situation, manydevelop countries because of their own economic problems, policy fault,leading to unbalance of international payment. Under internal and outsidereasons, severe financial turbulence or economic crisis was very easy tobreak out, leading these countries demand of international financialsupport. At the same time, international debt crisis was broken in1982,many banks and financial companies stringed their loan quota, so IMF wasbecoming their only supporter. IMF indeed does a good job on somedeveloping countries economic structure and development by loans andadditional conditions. But many times, these financial supports also didnot have good impact, sometimes leading the crisis worse. So the effectof these financial supports by IMF is disputable all the time.Most research of the effect of IMF support in the past was from theview of IMF, not considering the impact of international politics. Afterthe cold war, the west countries do not need use economic method to drawsome developing countries to their side and transfer to use the idea ofeconomic development to change these developing countries.IMF as aninternational financial institution controlled by the west countries alsoreflect this tendency. The international politics changes transferred tothe supported countries by additional conditions in policy choosing,internal economic redeployment and financial system reforming, finallyinfluenced the support effect. At the same time, during the politics,economy and society transfer in developing countries, even IMF giving abundant support, if they do not have a effective government and stablepolitics order, the financial support was always be abused or misused,finally not good result.In this paper, we try to use international political economy theory,international politics theory and comparative politics theory and othertheory to analyze the constraint factors of the effect of IMF support.The research of the past most based on economic and trade area, notconsidering the politics area. As a fact, the effect of IMF support wasalso strongly influenced by international politics and the effectivenessof their government. In this paper, we could have a better understandingof how the international economic cooperation is influenced by internaland international politics.The research idea of this paper are mainly enlightened by structuralrealism, neo-liberal system, and neo-Marxism international politics. Theauthor thinks that if the developing countries want to get good effectby IMF support programs, there must be having three conditions economicconditions, good internal politics and international politics. In thispaper, we try to analyze how inter and international politics influencedthe support effect. For the internal politics, we try to use politicalorder and governing capacity to analyze; for the international politics,we try to use international relations and geopolitics toanalyze.Considering the conciseness and certainty, we propose a doubledimensionality, four factor model. We regard IMF as a big country leadinginternational organization, its additional conditions influenced byinternational relations and geopolitics change.In the case of Egypt, we could see that how the loan to Egypt by IMFwho was controlled by USA was influenced by international politics andgeopolitics during1980s and1990s. In the case of Argentine, we couldsee that how IMF’s support was restrained by internal politics. In thecase of South Korea, we could see that under good international andinternal politics, the effect of IMF support was very good.Based on the case analysis, it is easy to found that the author’stheory hypothesis was verified. It is that if the supported countries want to get good effect, it must consider the internal and internationalpolitics situation. The western countries always boast that IMF supportpushed supported countries marketization and liberalization, finallydemocratization. Actually, it veiled the complex situation.In face of so many problems of IMF, the author think that the developingcountries,especially China, should put more effort to push IMF becominga more effective international financial situation. At the same time, withthe social and economic development, based on national interest and majorpower responsibility, China need to make great effort to establish a morestable and flourishing international monetary system.