Reflection Paper

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New York University **We aren't endorsed by this school
Course
INTE-GE 101
Subject
Economics
Date
Oct 14, 2023
Pages
4
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Fred Wilson Goodman Reflection Paper One of the main things I learned throughout this course was the IMF's role in international lending practices. The power the IMF has to lend extensive amounts of money to countries is something I did not know of before. The work of the IMF is different than the work of the World Bank due to the different lending practices and capabilities of each organization. The IMF has the ability to set up short-term loans for countries in need (Gutner, 2016). The decision-making of the IMF is based on the economic condition of the country in need (Gutner, 2016). I did not realize that what comes with the loans, are specific requirements. This approach to lending explains some of the problems the global south has had economically. These sorts of lending conditions also speak to the economic dependency a lot of lesser-developed countries have had on more developed countries. Another organization, the World Bank has worked in lending currency to other countries as well. Their primary vision is to reduce poverty and increase economic development (Gutner, 2016). They were founded with the same intentions as the IMF, and the two organizations have a sibling-like relationship in the world of international economics. There are some significant similarities between the IMF and the World Bank. The origin of both the IMF and World Bank are quite similar. Both organizations believed in economic development and stable currency conditions (Gutner, 2016). They were founded at the same time, with the same viewpoints on economic policy and improving the global economy. Historically there were similar reasons for the creation of these organizations. The results of the Great Depression, as well as World War II, point to the development of these two global
economic institutions (Gutner, 2016). The aftermath of the Great Depression impacted not only the US economy but the global economy as well. The negative implications of the great depression illustrated a great need for economic institutions (Gutner, 2016). Both the IMF and WB were developed to fill that void of a stable economic institution. The structure of the institutions is also similar. Both the IMF and the World Bank have a three-tiered structure within their respective governing bodies (Gutner, 2016). The management sector, board of directors, and board of governors are in this three-tiered structure (Gutner, 2016). Another major similarity between the IMF and World Bank is the amount of American influence within each organization (Gutner, 2016). The beginning stages of both organizations were a result of American funding. Another major influence the US has within the organizations is through voting power (Gutner, 2016). The voting power of the US is large and their overall shares in the organizations are significant compared to the rest of the world (Gutner, 2016). This was something I was not aware of previous to this class, and the theme of American influence is evident throughout the class. Additionally, in both the IMF and WB the amount of voting influence a member country can obtain is based on the capital that country is generating. Both organizations incentivize economic development through the ability to garner voting rights and influence. Both these organizations share similar criticisms because of economic policy While there are many similarities between the World Bank and IMF, there are also significant differences as well. First off, the World Bank places a higher emphasis on development. It is more noticeable when the World Bank is working with a country because of the tangible development projects they fund (Gutner, 2016). For example, a World Bank-funded project will see tangible results like a newly construed hospital or highway. The agency is focused on development and has a more hands-on approach to changing the physical landscape
of the country. The IMF is also a lending agency, but they work more behind the scenes. The IMF will work more within macroeconomic policy (Gutner, 2016). They work to change the financial structure of a country through policy recommendations. Both organizations can have a significant impact on the country, but the way each organization goes about it is different. Another topic in this class that I learned a lot about was the AU. In past classes, I have learned a lot about the EU, but have not learned much about the AU. The objectives of the AU are to promote economic development in the African region (Gutner, 2016). The AU's structure is similar to the EU, but the basic goals and implementation of policy differences. It was interesting to learn about the relationship between the AU and the UN in terms of international policy. The role of the AU's peace and security council is also interesting. Their relationship with the UN was interesting to study because of the complexities associated with it. The AU's relationship with the UN has some similarities with the IMF and World Bank's relationship with less-developed countries. The AU has developed its own objectives and policy, but they have had some issues with funding and peace operations. The UN has supported the AU with major peacekeeping operations (Gutner, 2016). A significant amount of the UN's budget is spent on peace operations in Africa. Some of the approaches the AU has taken toward promoting economic and peace development have been ineffective. First off some of the internal support from the AU's member countries have not been enough. The agendas of different countries have made it harder for the AU to create a unified front on economic development as well as peacekeeping operations (Gutner, 2016). To create a better environment for peacekeeping and economic development, the AU should work to create a more united front (Murithi, 2012). This could increase the credibility of the AU when in relation to other organizations such as the UN. The loss of credibility has already strained some relations. For example, the UN and AU
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