The IMF failure that wasn’t: risk ignorance during the European debt crisis

Abstract

This article builds on ignorance studies to revisit how we understand the role of expertise in international policymaking. A fundamental component of ignorance is concealing what you know. For experts, risk ignorance is a strategic resource when the policymaking process becomes a contested exchange. This article covers IMF lending programmes in Europe in 2008–13 with a special focus on Greece. Empirical data is drawn from policy documents. I find that risk ignorance at the IMF resulted from a joint process of ‘private alteration’ and ‘public obfuscation’: the alteration of normal scenarios of debt sustainability in private negotiations worked in tandem with the obfuscation of programme risks in the public stage. The empirical contribution of this article is to show that the ‘failure’ of the IMF programme for Greece can be reconceptualized as ‘success’. The immediate goal of the programme was to bailout Greece’s creditors and avoid the breakup of European monetary institutions. In this respect, the programme was successful. But success came at a huge cost for Greece. Analytically, this article suggests that knowledge procurement based on empirical fact‐gathering is not always the ultimate goal of international organizations and the communities of experts working within them.

Rethinking Sovereign Debt from Colonial Empires to Hegemony

“…From the 1980s onward, powerful shareholders like the US and Europe traditionally seek to influence IMF's programmes in terms of their own political, geopolitical, or even military interests (Stone, 2002). Multilateral forums such as the IMF work as a strong vehicle of state interests (Abbott & Snidal, 1998;Pénet, 2018a;Strange, 1996). And in many cases, states act through international organization to help private creditors recover their loans.…”

“…But the means of coercion have changed to a significant extent. Debt repayment mobilizes multilateral organizations like the IMF, the World Bank, and the Paris Club, whose practices of conditionality are hard to resist, even by Western countries, such as Greece recently (Pénet, 2018a). Hegemonic norms and rules of financial exchange may appear softer and more respectful of the sovereignty of debtor countries than colonial tools of debt dispute.…”

The Global South Debt Revolution That Wasn’t

“…Initially an outpost of transformative change, in the 1980s UNCTAD gradually became a technical agency. This shift in mandate is not unusual because the mandate of IOs is typically ambiguous (Best, 2012), making IOs prone to 'organizational slippage' (Babb, 2003) and discretionary influence exerted on their activities by their shareholders (Pénet, 2018).²⁶ In the following section we examine how UNCTAD adapted to this new, restricted mandate. In particular, we examine UNCTAD's response to external pressures to separate its activities into two distinct areas of work and the request that priority be given to downstream (technical) expertise compared to upstream (structural and macro) expertise.…”

La vuelta del FMI a la Argentina en 2018 desde una perspectiva neogramsciana

“…Si bien el programa fue exitoso ya que logró su objetivo de rescatar a los acreedores griegos y evitar la ruptura de las instituciones monetarias europeas, tuvo consecuencias sociales negativas (Pénet, 2018). En 2013, el desempleo llegó al 27.9% mientras que el desempleo juvenil fue del 60%.…”