Skalny Center for Polish and Eastern European Studies

The Peter D. Watson Center for Conflict and Cooperation

“Plaintiffs by Proxy: A Firm-Level Approach to WTO Dispute Resolution”

“Corporate Influence in World Bank Lending”

“Mixed Signals: IMF Lending and Capital Markets”

How is the United States able to control the IMF with only 17% of the votes? How are the rules of the global economy made? This book shows how a combination of formal and informal rules explain how international organizations really work. Randall W. Stone argues that formal rules apply in ordinary times, while informal power allows leading states to exert control when the stakes are high. International organizations are therefore best understood as equilibrium outcomes that balance the power and interests of the leading state and the member countries. Presenting a new model of institutional design and comparing the IMF, WTO and EU, Stone argues that institutional variations reflect the distribution of power and interests. He shows that US interests influence the size, terms and enforcement of IMF programs, and new data, archival documents and interviews reveal the shortcomings of IMF programs in Mexico, Russia, Korea, Indonesia and Argentina.

Controlling Institutions: International Organizations and the Global Economy

With the end of the Cold War, the International Monetary Fund emerged as the most powerful international institution in history. But how much influence can the IMF exert over fiercely contested issues in domestic politics that affect the lives of millions? In Lending Credibility, Randall Stone develops the first systematic approach to answering this question. Deploying an arsenal of methods from a range of social sciences rarely combined, he mounts a forceful challenge to conventional wisdom. Focusing on the former Soviet bloc, Stone finds that the IMF is neither as powerful as some critics fear, nor as weak as others believe, but that the answer hinges on the complex factor of how much credibility it can muster from country to country. Stone begins by building a formal, game-theoretic model of lending credibility, which he then subjects to sophisticated quantitative testing on original data from twenty-six countries over the 1990s. Next come detailed, interview-based case studies on negotiations between the IMF and Russia, Ukraine, Poland, and Bulgaria. Stone asserts that the IMF has exerted startling influence over economic policy in smaller countries, such as Poland and Bulgaria. However, where U.S. foreign policy interests come more heavily into play, as in Russia, the IMF cannot credibly commit to enforcing the loans-for-policy contract. This erodes its ability to facilitate enduring market reforms. Stone's context is the postcommunist transition in Europe and Asia, but his findings carry implications for IMF activities the world over.

Lending Credibility: The International Monetary Fund and the Post-Communist Transition (Princeton Studies in International History and Politics)

Why did the Soviet Union squander the political leverage afforded by its trade subsidy to Eastern Europe? Why did Soviet officials fail to bargain with resolve, to link subsidies to salient political issues, to make credible commitments, and to monitor the satellites' policies? Using an unprecedented array of formerly secret documents housed in archives in Moscow, Warsaw, and Prague, as well as interviews with former Communist officials across Eastern Europe, Randall Stone answers these questions and others that have long vexed Western political scientists. Stone argues that trade politics revolved around the incentives created by distorted prices. The East European satellites profited by trading on the margin between prices on the Western market and those in the Soviet bloc. The Soviet Union made numerous attempts to reduce its implicit trade subsidy and increase the efficiency of the bloc, but the satellites managed consistently to outmaneuver Soviet negotiators. Stone demonstrates how the East Europeans artfully resisted Soviet objectives. Stone draws upon recent developments in bargaining and principal-agent theory, arguing that the incentives created by domestic institutions weakened Soviet bargaining strategies. In effect, he suggests, perverse incentive structures in the Soviet economy were exported into Soviet foreign policy. Furthermore, Stone argues, incentives to smother information were so deeply entrenched that they frustrated numerous attempts to reform Soviet institutions.

Satellites and Commissars: Strategy and Conflict in the Politics of Soviet-Bloc Trade (Princeton Studies in International History and Politics)

The University of Rochester is one of the country's top-tier research universities. Our campuses are home to 200 academic majors, more than 2,000 faculty and instructional staff, and some 10,000 students.The University gives students exceptional opportunities for interdisciplinary study and close collaboration with faculty through its unique cluster-based curriculum. Its College, School of Arts and Sciences, and Hajim School of Engineering and Applied Sciences are complemented by its Eastman School of Music, Simon School of Business, Warner School of Education, Laboratory for Laser Energetics, School of Medicine and Dentistry, School of Nursing, Eastman Institute for Oral Health, and the Memorial Art Gallery. 





University of Rochester

Stone’s research focuses on international finance and international organizations. His books include “Controlling Institutions: International Organizations and the Global Economy” (Cambridge, 2011), for which he was awarded the International Studies Association’s Chadwick F. Alger Prize in 2012; “Lending Credibility: The International Monetary Fund and the Post-Communist Transition” (Princeton, 2002); and “Satellites and Commissars: Strategy and Conflict in the Politics of Soviet-Bloc Trade” (Princeton, 1996). Articles have appeared in the American Political Science Review, International Organization, Journal of Politics, British Journal of Political Science, International Studies Quarterly, the Journal of Conflict Resolution, Review of International Organizations, and Global Environmental Politics.

Has been awarded grants by the NSF, SSRC, NCEEER, and IREX, and was the last recipient of the Soviet Peace Prize (1991). Stone teaches courses in international relations, international and comparative political economy, international organization, and Russian and East European politics.

Stone has been cited by the New York Times, CNBC, PBS News, and Foreign Policy Magazine for his insight into current affairs in Ukraine and Crimea.

International Monetary Fund

International Economics

Multinational Corporations

International relations and finance

Russia and Eastern Europe

The Skalny Center for Polish and Central European Studies

Putin Warns of 'Full-Scale World War III' in Victory Speech

Why have Navalny and others been killed?

Polish Film Festival Goes Virtual

University joins Climate Action 100+ in support of sustainable investing

Polish Film Festival provides insights from abroad

Understanding the situation in Ukraine

Discussing NATO and President Trump's visit with Vladimir Putin

Multinationals pull strings at World Bank

An update on U.S.-Russia relations

Professor of Political Science and Director of  the Skalny Center for Polish & Central European Studies

Stone points to the IMF Funds ability to bring critical financial reforms and resources to countries facing currency crises  timely aid that allows them to avoid economic collapse. But Stone notes that the IMF has a credibility problem.  In politically important countries, or ones that pose systemic risks like Greece, the IMF is unable to enforce meaningful economic reforms, so its intervention generally fails.

Help us caption & translate this video!

http://amara.org/v/CHB4/

Randall W. Stone: IMF Strength and Weakness

Select Inquiry Type