| The context of this study is external finance in countries undergoing transition from communist, centrally controlled economies to democratic, market economies. The relationship between multilateral financial institutions (MIFIs), individual nations, and private international financial institutions (PIFIs) in three advanced transition countries--Poland, Hungary, and the Czech Republic--is examined. The character of the relationship between these three sets of actors is defined and described. Theoretical and policy driven hypotheses are tested. Some of the particular hypotheses examined are: that MIFIs exert a catalytic influence on PIFIs; that wealthier more powerful Western nations intervene and influence this process; that the size and number of actors significantly influence cooperative and conflictual behavior on lending and investment decisions; that MIFIs exercise leadership in the provision of external finance by its reduction of risk; that time horizons, and organizational and national interests, materially influence lending and investment decisions; and that information asymmetries and the bounded rationality of actors explain lending and investment decisions. Many of the findings of the study contradict conventional held policy tenets and theoretical predictions. For example, the catalytic function of MIFIs was found to be weak, especially with regard to international banks. The role and influence of Western nations varied across several dimensions, including national interest, technical expertise, debtor country geography, and debtor country economic management. Typically, studies addressing transition or international finance deal with the domestic aspects of transition or the particular character and effects of MIFIs. This study's unique contribution is that it is an examination of an important external dimension of transition, and an investigation of a rarely explored relationship between public multilateral organizations and private financial organizations. |
