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Disciplining the Banks

Disciplining the Banks

(p.99) Chapter Four Disciplining the Banks
Behind the Development Banks
University of Chicago Press

This chapter describes the Treasury testimonies to Congress in the 1980s to explore the first Ronald Reagan administration's policies toward the multilateral development banks (MDBs). The first Reagan administration's relative quiescence on structural adjustment can be attributed to ambivalence about policy-based lending, both within the administration and among members of Congress. It is shown that, for the first several years after the debt crisis began, the golden opportunity to use the MDBs to leverage policy reforms was not fully exploited. The pattern of U.S. voting on project loans provides an incomplete sense of overall U.S. pressures. The Reagan team's pattern of voting on the boards of the MDBs sent a strong message that the United States was committed to bringing sound economics to developing countries. It appears that, where program lending was concerned, the first Reagan administration may have been an inconsistent advocate at best.

Keywords:   Treasury testimonies, Congress, Reagan administration, policy-based lending, leverage policy reforms

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