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Jour Fixe with Susanne Lütz and Matthias Kranke, 4 July 2011
06/30/2011
We kindly invite you to the next Jour Fixe: Matthias Kranke will be presenting the paper on “The Paradox of Weakness in Crisis Lending: How the European Commission Prevails over the IMF” (co-authored with Susanne Lütz). Eugénia da Conceição-Heldt will be discussant in the session.
The Jour Fixe begins at 4.15 pm (16.15 Uhr) and takes place at Ihnestr. 26, Room 202.
Abstract
The latest global financial crisis triggered economic hardship also among member states of the European Union (EU). To help countries in crisis, the International Monetary Fund and the EU have so far set up joint programs for Hungary, Latvia, Romania, Greece, and Ireland. This paper analyzes the novel IMF-EU crisis lending coordination from a principal-agent perspective. We take an interesting empirical observation as our point of departure. The IMF has advocated more Keynesian economic policies, but the loan programs at best partly reflect its new approach. We seek to explain this discrepancy with the limited discretion that the European Commission as an agent of the EU member state is granted for negotiating the pro-grams with the IMF. There is, we argue, a “paradox of weakness” at work in crisis lending, which translates the Commission’s weak internal position into a strong external one vis-à-vis the IMF. The nature of intra-organizational delegation affects inter-organizational coordina-tion patterns.
