Current Institutional Affiliation
Senior Associate Professor, Division of Arts and Sciences, College of Liberal Arts, International Christian University

Award Information

Abe Fellowship 2012
Institutional Affiliation (at time of award):
Associate Professor, Law and Public Policy, International Christian University
Effects of the IMF and the World Bank on Financial Policy Reforms: Comparing the Influence of the United States and Japan on the IMF and the World Bank Programs

Do the International Monetary Fund (IMF) and the World Bank (WB) act independently to promote universal neoliberal reforms and globalization? Or do their actions reflect the interest of major donors such as the United States and Japan? Or do the countries are autonomous in choosing the course of their financial reform?  This research project aims to assess the degree to which the IMF and the WB influence policy reforms in a country by examining financial sector reforms as a case of one of the most important policy areas. Financial reforms such as capital account liberalization and banking reforms are the key policy areas for both the IMF and the WB programs in which the WB programs tend to focus on long-term structural reforms, while the IMF programs tends to put more emphasis on maintaining financial stability. In order to reduce vulnerability in the financial sector, the IMF and the WB jointly initiated the Financial Sector Assessment Program (FSAP) in 1999. The FSAP has been considered a good example of collaboration between the IMF and the WB (WB 2007, 2010). Previous studies show that the interests of major states, particularly by the United States, influence the decisions on the IMF and the WB programs. However, little attention has been paid to the impacts of IMF and WB programs on policy outputs. Hence, this research project aims to assess the degree to which the IMF and the WB facilitate financial reforms independently and jointly by employing quantitative methods and case studies. I argue that the influence of major donor interests on the direction of financial reform heavily depends on the dimension of such reform. In pushing for liberal financial policy reforms, if the US and Japan have more trade or aid linkages with a country, these major states exert influences on a country via IMF and WB programs to facilitate liberal oriented reforms such as capital account liberalization and privatization of banks. However, in the regulatory dimension, IMF and WB programs work more independently from these major states' interests because US and Japan would not prefer tighter regulations abroad since their firms and banks would become subjects to tougher regulations in these countries. Using the Financial Reform Database, which covers seven dimensions of financial reforms in 91 economies from 1973 to 2005, and updating this dataset to cover the period after the global financial crisis, this study quantitatively assesses the degree to which the IMF and the WB facilitate financial reforms independently and jointly, and whether these effects are independent from the US and Japan. As for case studies, Indonesia, Pakistan, Mexico, and Hungary will be selected based on variations in Bank or Fund programs and variations in their importance for the US and Japan. To conduct this research project during my sabbatical, I plan to visit Washington DC to update the Financial Reform Database and to conduct interviews with IMF and WB staff. I will stay in the US as a visiting scholar at the IMF or at a university.