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This chapter examines the role of the Secretary-General as the “face” of the United Nations, focusing specifically on the two African Secretaries-General: Boutros Boutros-Ghali (1992–1996) and Kofi Annan (1997–2006). Though I characterize Boutros-Ghali and Annan respectively as “the pharaoh” and “the prophet”, every Secretary-General has exhibited such traits, as well as those of a third and more common metaphor of being a sort of “Pope”. Through these three lenses, the chapter examines the major achievements and failures of Boutros-Ghali and Annan, as well as the reaction of key actors at the United Nations to the efforts of both men to achieve their objectives in the areas of peace and security, socio-economic development, and “humanitarian intervention”. Since both Africans occupied the post for the fifteen years after the end of the Cold War, this is also a study of the role of the Secretary-General in the post-Cold War era. This period saw tremendous changes in the geopolitical landscape, including the collapse of the Communist Bloc and the rise of a unipolar world, the eruption of conflicts in the Balkans and Africa, and an increase in the membership of the United Nations from 159 to 192. All of these transformations had an impact on the United Nations in general but led, in different ways, to greater attention being paid to the role of its Chief Administrative Officer. Another reason to focus on the two African Secretaries-General concerns the importance of the United Nations to Africa and vice versa. [ABSTRACT FROM AUTHOR]

Introduction The findings of our study have ethical and practical implications. Since the passage of the United Nations Universal Declaration of Human Rights in 1948, the promotion of better human rights practices by governments around the world has been one of the most important functions of the United Nations. It is morally wrong for agencies of the United Nations, which include both the World Bank and the International Monetary Fund, to undermine one of their parent organization's most important goals, the promotion of good human rights practices (Clapham 2006; Darrow 2003; Skogly 1993; 2001). The practical implication of our findings is that structural adjustment programs are not producing good economic outcomes mainly because they combine relatively ineffective policies with the undermining of a necessary precondition for economic growth – respect for human rights. The World Bank and IMF should be pursuing equitable economic development. We have defined equitable economic development as the simultaneous achievement of economic growth and advancement in protections of economic and social rights of citizens. Achieving one element without the other should be considered “development failure.” We argue that respect for some human rights will promote equitable development. More precisely, respect for some physical integrity and civil rights and liberties will lead to faster rates of economic growth and progress in achieving respect for economic and social rights to such things as health care, education, and housing. [ABSTRACT FROM AUTHOR]

Introduction Developing countries are likely to have a higher rate of economic growth if they have democratic political institutions and if their citizens have protections of their civil liberties (Kaufmann 2005; Kaufmann and Pritchett 1998; Sen 1999). Critics of the World Bank and IMF have contended that structural adjustment agreements undermine institutional democracy and protections of civil liberties. There were four main variants to this “undermining democracy” argument. The first three critiques focus on the deleterious effects of structural adjustment on the development of democratic institutions and democratic methods for selecting leaders. We find no evidence in support of this critique. In fact, we find considerable evidence to the contrary. Countries undergoing structural adjustment were more likely to develop democratic institutions and democratic human rights than those not undergoing structural adjustment. The fourth argument suggesting that the implementation of structural adjustment programs undermines democratic rights is not about procedural democracy. It is about substantive democracy or the extent to which the actual policies produced in a society reflect what most people want. It's an important contention, and we will return to it later, but it is not an argument that can be tested using the kinds of evidence available for large-scale comparative analysis of the type we have conducted in this project. The first argument was that the World Bank and IMF allegedly were more willing to negotiate with authoritarian governments than with democratic governments, because authoritarian governments were more likely to implement unpopular policies (Pion-Berlin 1984; 1989; 1997; 2001). [ABSTRACT FROM AUTHOR]

Introduction As we have shown in previous chapters, countries under structural adjustment for a relatively long period tend to have governments that provide lower than expected levels of respect for economic and social rights (Chapter 7). The deprivations caused by structural adjustment conditions are generally unpopular in less developed countries: anti-government demonstrations occur more often (Chapter 7). Sometimes these protests become violent, increasing the occurrence of riots and organized rebellion (Chapter 7). Governments often respond to these challenges to their authority by increasing the repression of physical integrity rights (Chapter 8). Many country studies have also provided evidence that structural adjustment conditions have led to reduced government respect for worker rights. For example, comparative case studies conducted by the Structural Adjustment Participatory Review International Network (SAPRIN) took a close look at the effects of structural adjustment programs on workers in Ecuador, El Salvador, Mexico, and Zimbabwe (SAPRIN 2004). The study's findings showed how a combination of labor-market reforms, layoffs resulting from privatizations and civil service reform, and the shrinking of labor-intensive productive sectors had severely undermined the position of workers. Employment levels had dropped, jobs had become more precarious, real wages had deteriorated, income distribution had become less equitable, and worker rights and unions had been weakened. Structural adjustment reforms had allowed employers greater flexibility in establishing the terms and conditions of work, and public enterprises had been privatized without adequate regulation (SAPRIN 2004, Chapter 4; also see Heredia and Purcell 1996; Lloyd 2001). [ABSTRACT FROM AUTHOR]

Introduction Dramatic scenes of anti-government protest and rioting, which were met with acts of government-sponsored repression, took place across Morocco in the summer of 1981. These protests and the government's violent response came in the midst of an economic slump caused by lower levels of international demand for phosphates, fruits, and vegetables, Morocco's main exports (Paul 1981: 30). The bleak economic situation was worsened by austerity measures imposed by the International Monetary Fund, which called for the removal of food price subsidies and cuts in government spending (Paul 1981: 30). Paul (1981) describes in detail the violent repercussions of government-spending reductions which led to spontaneous demonstrations. Many students responded to reductions in education funding mandated by the IMF with rioting. The government responded to this first round of action with arrests of members of the former communist party and socialist parties in Morocco. Demonstrators were arrested and brought to trial for “endangering public order.” Organized labor responded to the removal of price controls with calls for action. The Moroccan Trade Union Confederation called for a strike, which turned out to be very successful. The effect of this strike almost entirely shut down Morocco's largest city, Casablanca. Two days after this strike union leaders asked all citizens to join the protest. Demonstrators poured into the streets in all parts of the country, turning over buses, smashing cars and windows, setting things on fire, often targeting banks in the process. [ABSTRACT FROM AUTHOR]

Introduction The causes of why people engage in anti-government protest and rebellion are multifaceted (e.g., Fearon and Laitin 2003; Regan and Henderson 2002; Regan and Norton 2005; Sambanis 2004a; 2004b). The reasons for these actions fall into two broad categories. The first concerns groups that take action for political reasons, choosing their moment to take advantage of governmental weakness. Second, groups take action against their government because they have fared poorly under its economic policies. This research demonstrates that the consequences of World Bank and International Monetary Fund involvement in the governance of developing countries increase the probability of anti-government protest and rebellion along two dimensions already highlighted in the civil conflict literature. The first describes how the involvement of these international financial institutions constitutes a marker of government weakness increasing the probability of rebellion as opposition groups sanction violent attacks to take advantage of this situation for their own political advantage. The second concerns the deleterious economic consequences of these agreements on developing countries. The consequences of these programs increase levels of hardship for many people in countries undergoing structural adjustment. Many more citizens, as a result, have been harshly treated by their governments leading to greater amounts of anti-government protest and rebellion as people try to change government policy to improve their personal circumstances. The evidence presented later provides support for these arguments linking the negotiation of structural adjustment agreements with an increased probability of rebellion. [ABSTRACT FROM AUTHOR]

Introduction In 2000, the World Bank and IMF, the Organisation for Economic Co-operation and Development, and the United Nations published a jointly prepared document titled A Better World for All. In it, the world's two most important international financial institutions guaranteed that, in partnership with others, they would make substantial progress in reducing world poverty by 2015. The report proposes measuring poverty reduction in seven areas: world poverty (the percentage of people living on the equivalent of 1 US dollar or less per day), gender gaps in school enrollment, primary school enrollment, infant mortality and maternal mortality (Sadasivam 1997), access to health services, and sustainable development. Among other specific goals mentioned in the report, the promises include decreasing rates of infant mortality by two-thirds and maternal mortality by three-fourths, providing access to all that need health services, and ensuring that all children are enrolled in primary school. Taken together, the goals in the report are commonly referred to as the “Millennium Development Goals.” This report and these promises made in it were necessary because there is a growing consensus that most of the countries we usually refer to as “developing economies” are not developing at all or are not developing as quickly as had been hoped. Jeffrey Sachs, an economist who directs the Millennium Development Project, notes that, according to World Bank estimates, 1.1 billion people or about one-sixth of the world's population live in extreme poverty (Sachs 2005). [ABSTRACT FROM AUTHOR]

Introduction In 1982 the Republican administration of Ronald Reagan voiced concern over the state of emergency decreed by the Chilean military government of Augusto Pinochet and the increased levels of human rights abuses that were taking place. The administration threatened to direct its representative to the IMF to vote against the award of structural adjustment packages unless the Pinochet regime lifted its state of emergency and improved its record of respect for human rights. Three years later the Reagan administration also abstained in its support for World Bank and IMF loans to Chile for several months until the regime lifted its state of siege (Coad 1985; Omang 1985). Apparently the administration was concerned over the levels of human rights abuses taking place; most attention had been paid to the opposition press censorship (Coad 1985). This example provides an intriguing contrast to the founding charter of both the World Bank and International Monetary Fund, which excludes political considerations in the loan-agreement process of these institutions. When decisions are being made about the allocation, amount, and conditions under which resources are apportioned, the idea that only economic factors affect the evaluation of member countries' representatives to these decision-making boards, is, at best, wishful thinking: politics inevitably becomes involved. In our historical assessment of how these institutions came to make their decisions over the 1981–2003 period, we built upon the existing literature that identified significant factors affecting the decisions of these institutions to enter into structural adjustment agreements with developing countries. [ABSTRACT FROM AUTHOR]

Introduction Based on the critiques of structural adjustment programs described in Chapter 3, the weight of most case study findings, and the findings of the highest-quality large-n comparative studies, our main hypothesis was that, other things being equal, the more years a developing country had been under structural adjustment the worse its government's respect for most human rights. In addition, consistent with the critical perspective presented in the previous chapter, we expected to find that greater exposure to structural adjustment conditions would be associated with more civil conflict, especially violent civil conflict. In this chapter we examine a number of issues that recur throughout the rest of the book. We describe the importance of studying both the World Bank and IMF if one is interested in estimating the impact of structural adjustment. We explain the importance of controlling for the effects of selection. We also discuss how we measured structural adjustment receipt and implementation: two of the key variables used. Part of the chapter discusses the use of the CIRI data set which provides the source of many of the dependent variables used in the analyses (Cingranelli and Richards 2006). Finally, some of the control variables common to several of the chapters are described. Why study both the World Bank and International Monetary Fund? Both institutions promote structural adjustment policies, yet the great majority of existing research has concentrated on one institution. [ABSTRACT FROM AUTHOR]

Introduction What is the impact of the World Bank and International Monetary Fund on government respect for human rights and on equitable economic development? Many different groups have protested that the impacts have been negative. Recent anti-structural adjustment demonstrations have taken place at the 1999 Ministerial Meeting of the World Trade Organization (WTO) in Seattle, at the annual meetings of the IMF and World Bank (in Washington DC on alternate years), and at the annual summits of the Group of 8 (G8) industrialized countries. There were massive protests at the 2005 Summit of the Americas in Mar del Plata (near Buenos Aires), at the 2000 Annual Meeting of the IMF and World Bank in Prague, and at the 2001 G8 meeting in Turin, among others. Protesters have questioned the motives and criticized the impacts of these institutions on the economies and societies of liberalizing countries. The popular press has reported upon the activities of these institutions extensively, with much criticism of the austerity measures that have been associated with structural adjustment agreements and their harsh consequences in developing countries. With emotions raised and hyperbole flowing, we need to step back and ask if the criticism of these institutions is warranted. Has the academic community generated any answers when trying to assess the impact of these institutions? Recent studies which have controlled for what have become known as “issues of selection” have concluded that IMF structural adjustment agreements have deleterious consequences on economic growth (Przeworski and Vreeland 2000; Vreeland 2003). [ABSTRACT FROM AUTHOR]

Introduction There is a growing consensus that greater respect for certain human rights leads to economic development that benefits a broader section of society. In this chapter, we explore the logic behind this argument and discuss the relevant findings from previous research. Based on this logic and empirical findings, we conclude that the Bank and the Fund ought to be pursuing a human rights-based approach to economic development in less developed countries. In Chapter 11, we explicitly define what such an approach would look like. For now, let us simply define a human rights-based approach to economic development as one that explicitly seeks to improve the human rights practices of the governments of developing countries as a method to improve levels of economic development. We begin by defining economic development. Economic development that includes economic growth accompanied by a relatively high level of respect for economic and social rights has been described as “equitable economic development” (Sen 1999). It is also sometimes called “high-quality economic growth,” “pro-poor economic growth,” or “equitable economic growth,” the term we will use. This type of growth we believe is the appropriate measure to decide whether economic development is taking place within a society. This is also the standard that we believe should be used to evaluate the economic outcomes of structural adjustment programs. [ABSTRACT FROM AUTHOR]

Introduction In 1981, the Reagan administration in the US, the Thatcher administration in the UK, and their allies compelled the International Monetary Fund (IMF) and World Bank Group (known as the “International Financial Institutions” [IFIs]) to launch an ideological assault against the state and promote a shift in power from the state to the market. From 1981 to the present, the IFIs have financed structural adjustment agreements (SAAs) in developing and transition countries to achieve that goal. Structural adjustment agreements call upon recipient governments to liberalize and privatize economies in the context of strict budget discipline. Adjustment lending facilitates economic integration – the hallmark of globalization – on terms that are advantageous to corporate and finance capital. The policy conditions associated with adjustment loans have accelerated transnational corporate penetration and expansion of markets in developing countries and lowered risks of portfolio investment and foreign direct investment. The role of the state has been reshaped to serve market liberalization, as governments have downsized, decentralized, and privatized (or “contracted out”) their functions. Such measures were intended to jump-start economic growth and free up resources for debt service. However, in most countries, public investment in critical areas (health care, education, infrastructure) foundered, growth rates were disappointing, and debts mounted to unsustainable levels (Pettifor 2001). This volume explores the relationship between adjustment and respect for human rights. Importantly, as governments in developing countries implemented World Bank and IMF-financed structural adjustment programs (SAPs), respect for human rights diminished. [ABSTRACT FROM AUTHOR]

Why would an entrenched authoritarian regime establish an independent constitutional court with the power of judicial review? This is one of the most intriguing questions for students of contemporary Egyptian politics. In a country where the ruling regime exerts its influence on all facets of political and associational life, it granted the Supreme Constitutional Court (SCC) substantial autonomy from executive control. The paradox is all the more intriguing when one reviews the surprisingly bold rulings that the SCC delivered in a variety of areas over the past quarter-century. The Court consistently worked to curtail executive powers, expand freedom of expression, and shield groups active in civil society from state domination. Moreover, it provided the most important avenue for opposition parties, human rights groups, and political activists of every stripe to credibly challenge the Egyptian government for the first time since the 1952 military coup. Opposition parties used the SCC to contest electoral laws and strict constraints on political activity, human rights groups used the SCC to strengthen civil and human rights safeguards, leftists initiated litigation aimed at blocking the regime's privatization program, and even Islamists mobilized through the SCC to challenge the secular underpinnings of the state. In the process, the Supreme Constitutional Court stood at the center of the most heated debates concerning the political direction and even the fundamental identity of the Egyptian state. [ABSTRACT FROM AUTHOR]

Scholars and policymakers have placed a great deal of faith in judicial reform as a cure-all for the political and economic turmoil plaguing developing countries in Latin America, Asia, Africa, and the Middle East. Rule-of-law institutions have been charged with safeguarding human rights, spurring economic development, and even facilitating transitions to democracy. These expectations are grounded in our understanding of the way that legal institutions, markets, and the state developed in the West. Although dependency scholars and others have highlighted the radically different circumstances that “late-late” developing countries face, there is still a pervasive assumption that rule-of-law institutions, market economies, and democracy are self-reinforcing. Indeed, these relationships seem both intuitively sound and historically accurate. Some of the earliest writings in the social sciences by Adam Smith, Max Weber, David Ricardo, and others examined how independent and effective judicial institutions provided the stable property rights system necessary for long time horizons and vigorous private investment. Similarly, judicial institutions are seen as essential tools for providing the checks and balances necessary to curb arbitrary rule. In this view, arbitrary rule is inimical to democratic governance and viable market economies alike, making legal infrastructure essential not only to enforce the rules of the economic game, but to enforce the rules of the political game as well. Finally, we have long observed that economic growth and market economies are positively correlated with the social requisites for democracy. [ABSTRACT FROM AUTHOR]

The complexity of post-socialist transition was unprecedented. Initially, no one could accurately predict its pace or foresee how soon and to what extent it would be accomplished. For example, when Solidarity's victory in the 1989 elections opened the “window of opportunity” for Polish reformers, it was impossible to assess the extent of Poland's problems and foresee the difficulties that would arise as the society and the economy adapted to market conditions. But today the stage of transformational recession, as well as the discussion about its causes and consequences, belongs to the past. Although major difficulties still have to be overcome, the economies of post-socialist countries largely display stable GDP growth and effective market mechanisms. Transformational recession can be explained rather simply. The dismantling of the socialist economic structure revealed a sad circumstance: a substantial part of the economic activities carried out under socialism would never be needed in a market economy or democracy. The redistribution of resources concentrated in those activities cannot occur overnight. Processes that occurred at this stage of post-socialist recession were reminiscent of what Joseph Schumpeter (1950) described as “creative destruction,” but they occurred on a scale unprecedented for market economies. It is vital to understand that both post-socialist recession (the adaptive decrease in production) and the subsequent recovery are part and parcel of a single process, whose essence is the structural rebuilding of the economy. [ABSTRACT FROM AUTHOR]

Introduction The accession of ten new member states to the European Union on May 1, 2004, brought deep changes to Europe's political economy, both toward the new member states and the EU's “new neighbors” to the east and south. To formulate a policy toward these “new neighbors,” the European Commission (EC) presented the European Neighbourhood Policy (ENP) strategy paper, setting out a new framework for relations and financial support for the neighborhood countries in May 2004 (EC, 2004a). The neighbors in question were Ukraine, Belarus, Moldova, Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Morocco, Syria, Tunisia, and the Palestinian Authority, with the recommendation to also include Armenia, Azerbaijan, and Georgia. Russia was included as a privileged partner. Then European Commission President Romano Prodi described the goal of the ENP as seeking to create a “ring of friends” around the EU, by offering close cooperation on issues ranging from political dialogue to economic integration. This initiative was supposed to allow these neighbors to participate in major EU policies and programs, and ultimately in the EU's single market. ENP participants were expected to form a relationship with the EU similar to that of the European Economic Area (EEA) members, such as Norway, Iceland, and Liechtenstein. This chapter describes the general framework of the EU's emerging relationship with its new neighbors and explores the potential economic impact of the ENP, both for the EU itself and for its neighbors in the Commonwealth of Independent States (CIS): Armenia, Azerbaijan, Belarus, Georgia, Moldova, Russia, and Ukraine. [ABSTRACT FROM AUTHOR]

Introduction In his revolutionary work, the godfather of modern fiscal policy Lord Maynard Keynes gave a central role to discretion in fiscal policy. Thus, in some ways, he, and even more his followers, who probably pushed his ideas beyond where he would have liked, gave policy makers what many of them had always wanted: a justification for spending more or, in particular cases, for reducing taxes without cutting public spending. A correct or effective discretionary fiscal policy is, however, difficult to pursue because it requires information and attitudes that are often in short supply. When countries try to fine-tune their fiscal policy, they often end up making mistakes. This chapter focuses on those difficulties within the European context. It discusses problems that have not received the attention that they deserve. Since it was first proposed, and then endorsed by the Keynesians, with a revolutionary fervor that at times paralleled that of true religious believers, countercyclical fiscal policy has been subjected to occasional criticism. Three major lines of criticism can be distinguished. First is the existence of various lags. It was noticed from the beginning that there are likely to be lags in (1) the recognition that fiscal action is needed, (2) the taking of the action, and (3) the time that passes between when the action is taken and when the economy begins to feel its effects. These lags reduce the effectiveness of countercyclical policy. [ABSTRACT FROM AUTHOR]

The Conservative party and Keynes may seem an unlikely pairing. In the 1920s and 1930s it was, above all, Conservative administrations that Keynes found himself ranged against as he sought, in vain, to persuade governments to pursue more active policies to counter mass unemployment. The Conservative leader from 1923 to 1937, Stanley Baldwin, was a particular target. In November 1923, Keynes described a speech by Baldwin in Manchester as an example of ‘the exaltation of a sort of mystical stupidity, with which the Tory, generally sentimentalising himself on these occasions as the “plain, business man”, likes to present his nostrums for the cure of economic facts’. Baldwin was by no means the only Conservative to endure Keynes's criticism and scathing wit. Winston Churchill's decision to return to the Gold Standard received a powerful broadside (in The Economic Consequences of Mr Churchill) whilst those who backed his decision were accused of supporting ‘what is jejune and intellectually sterile; and since it has prejudice on its side, it can use claptrap with impunity’. Conservative advocates of extreme laissez-faire were subject to Keynes's particular hostility, but he was also clear that attempts by ‘more moderate Conservatives, under Mr Baldwin … to temper the same logic with mercy and expediency’ were fruitless as they were at ‘the mercy of the noisy anti-trade union, anti-communist, anti-everything man who has always been the muscle and brawn of their party’. [ABSTRACT FROM AUTHOR]

In September 1994, during the early months of the phenomenon known as ‘New Labour’, The Independent carried the headline ‘Blair ditches Keynes’. It was reported that Labour leaders would tell a conference of businessmen and academics ‘that the party has turned its back on Keynesian economics and “the old ways of corporatism”’. In fact, Blair used his speech to insist that Keynes's legacy of demand management had never implied increasing demand ‘irrespective of economic circumstances and even at a time of inflation and high borrowing’. Real Keynesianism, in his view, represented a wider critique of the functioning of capitalism – not a call for permanent government pump-priming. Likewise, Gordon Brown stated on the same occasion that ‘I am not here to bury the real Keynes but to praise him’. This is an approach that New Labour followed in government. Blair continued to cite Keynes as an example of the beneficial influence of Liberalism on the Labour party. Brown, as Chancellor, asserted that although New Labour rejected ‘crude “Keynesianism”’, the government sought ‘to draw on the best of Keynes’ insights about political economy and put a modern Keynesian approach into practice'. Blair and Brown's approach represents an attempt, whether conscious or otherwise, to employ Peter Clarke's useful distinction between ‘Keynesianism’ and ‘the historical Keynes’. In their opinion, the views of the ‘real’ (or ‘historical’) Keynes were misinterpreted by the economists and politicians who came after him. [ABSTRACT FROM AUTHOR]

Introduction In 2004, Haiti's fortunes executed a full circle. Shortly after leading the celebrations marking Haiti's bicentennial anniversary of its independence in February 2004, Jean-Bertrand Aristide, three-time president of Haiti, was swept from power by violent rebellion. Aristide's departure and the preceding turmoil, the culmination of a political and economic crisis that had festered for years, provoked a US and French military intervention, shortly thereafter replaced by a United Nations (UN) peacekeeping force to restore order and create the conditions for long term stability and democracy. These unhappy developments are all the more striking for following on intense international involvement in Haiti's affairs throughout the 1990s. In particular, the UN engaged in a broad range of activities in support of democracy in Haiti, including election monitoring in 1990, UN Security Council (UNSC)-mandated sanctions in 1993–1994, a naval blockade in 1993–1994, UNSC-authorised use of force in 1994 against the military regime that had removed Aristide from power three years earlier and a major peacekeeping operation (PKO) in the years 1994–1996, subsequently reduced to a small international force aimed at building a domestic police force. The case offers the first, and to date only, instance of the UNSC authorising the use of force to effect the restoration of democracy within a member state. Unlike in a number of other situations, democratic processes were not seen as a means of national reconciliation, nor were elections seen as a mechanism to anchor fragile peace agreements. [ABSTRACT FROM AUTHOR]

Introduction Three developments with significant implications for the management of the world economy in the 1990s were growth in emerging markets, capital mobility, and the rise of regionalism. After the “lost decade” of the 1980s growth accelerated in the developing world. Exports from developing countries grew twice as rapidly as production, by nearly 10 percent per annum. Disturbances in emerging markets, including financial crises, became a prominent concern. And emerging market economies, for their part, increasingly insisted on a voice in the management of the international system. The preceding reference to financial crises points to the second important development, namely rising capital mobility. A growing number of countries relaxed controls on capital movements in the 1980s and 1990s. Advances in information and communications technologies reduced the costs and increased the attractions of investing across borders. In response, net private capital flows to developing countries rose sixfold between 1983–1989 and 1993–1996. Capital mobility promised to extend the benefits of portfolio diversification, consumption smoothing, and higher rates of capital formation to developing countries. But capital flows proved not just large but also volatile. Their management thus proved a major challenge. The third important development was the rise of regionalism. The 1990s saw the deepening and widening of the European Union. It also saw the establishment of NAFTA (the North American Free Trade Agreement) and the development of Asian regionalism. [ABSTRACT FROM AUTHOR]

The EC's policy of conditional recognition, we have seen, represents a significant departure from legal thinking and historic state practice as well as a novel approach to conflict management. It is not, however, the first time that conditionality has been used in support of political aims. For more than two decades, states and multilateral organisations have been employing political conditionality in their relations with developing countries, often in pursuit of objectives akin to those of the EC in Yugoslavia, such as the promotion of human rights and, more recently, democratisation and ‘good governance’. Indeed, since the 1970s the EC/EU itself has used and continues to use political conditionality as part of its trade and aid programmes, imposing on recipient states requirements relating to their domestic political structures that in many ways are not unlike the requirements it stipulated for the new state authorities in Yugoslavia. This final chapter examines these parallel uses of political conditionality for what they suggest about the potential for, and the limitations of, conditional recognition as an instrument of conflict management. It charts the evolution of these policy initiatives and the thinking behind them – politically conditioned aid in particular – and explores the similarities they bear to the EC's use of conditional recognition. It also looks at how effective political conditionality has been and identifies factors that may account for its successes and shortcomings. [ABSTRACT FROM AUTHOR]

Chapter 3 argued for a view of diplomatic recognition as an informal regime governed by its own set of norms, legal as well as political, that historically have contributed to the maintenance of a stable order in the international system. Because the practice of recognition originates with states and serves to protect their interests, it is an inherently conservative institution. Outside of decolonisation states are reluctant to confer recognition on new claimants unless their claims are undisputed, for in the absence of terrae nullius (territories belonging to no one) recognition can only be achieved at the expense of existing states, and the dismemberment of one state is perceived to pose a threat to the integrity of all states as well as to weaken the foundations of the state-based international order. Although the EC's policy with regard to Yugoslavia might seem to contradict this view – to reflect instead an incautious and even subversive use of recognition – the EC, we have seen, sought to contain the disruptive effects of its actions by interpreting them so narrowly as to have limited application to other states. Statehood for Croatia thus would not mean statehood for, say, Spain's Catalonia or Russia's Chechnya. There is another way in which the practice of recognition, rather than serving to ensure stability, can be disruptive of the established order, and that is in its potential for exacerbating the violence that may accompany the creation of a new state, particularly if the parent state is contesting and seeking to suppress the emergence of the entity. [ABSTRACT FROM AUTHOR]

Chapter 2 examined the tradition of legal thinking and historic practice with respect to the recognition of states. The rationale for that exercise was the claim, in part, that if the EC's recognition of Yugoslav republics was driven primarily by political and strategic considerations, one could not dismiss the relevance of international law altogether. The claim rested on two observations: first, that the EC consciously and deliberately considered the question of recognition within a legal framework, evident most notably in its establishment of the Badinter Commission; and second, that the legal framework, once invoked, both facilitated and constrained the EC in some of its actions. This chapter returns to the latter point. For to suggest that the EC's response was at all moulded by international law would not only seem to contradict the views of legal scholars and political analysts alike who maintain that the Community's actions were motivated largely, if not entirely, by extra-legal considerations; it also begs a number of fundamental questions about the relationship between international law and politics in general and the bearing that both have on the recognition of states in particular. For instance, how does one distinguish conformity to law from the fortuitous coincidence of law and politics? And if international law at times does indeed facilitate and constrain international behaviour, how does it achieve that effect? [ABSTRACT FROM AUTHOR]

The split between idealists and realists is, of course, not the only debate to have divided the field of Yugoslav studies. For as long as I have been observing Yugoslavia, I have been struck by the ongoing (and unending) debate between scholars who have wanted to have faith in any formula or arrangement that might be presented as potentially stabilizing and favourable, and scholars who have lived in expectation that catastrophe was around the corner. This temperamental difference between optimists and pessimists was reflected in differing views of self-management, the 1974 constitution, post-Titoist policy in Kosovo, the prospects for communism in Eastern Europe as a whole, the dangers (or, for optimists, ‘alleged dangers’) of civil war in Yugoslavia, the prospects for the establishment of the rule of law in post-communist Eastern Europe, and the prospects for a negotiated peace in ex-Yugoslavia. In the early 1990s, one of the manifestations of this debate was that optimists took to blaming the Yugoslav civil war on Western manipulation (which was, in fact, the Serbian propaganda line), on the assumption that, left to themselves, the Yugoslavs would never have gone to war, while pessimists found sufficient roots of the conflict internally. To some extent, the difference between optimists and pessimists was sustained by differences in their very research methodologies. Optimists – who were sometimes ‘cynical optimists’, optimistic about system survival and institutional stability, but disinterested in human rights struggles locally – tended to focus their attention on official publications and to devote their interview energy to talking with officials. [ABSTRACT FROM AUTHOR]

The whole history of our state has been a search for ways to settle and provide stimuli to settle Siberia. Thanks to the industrialization and mass settlement of Siberia … Russia's population is scattered across a vast land mass in cities and towns with few principal connections between them…. One-third of the population has the added burden of living and working in particularly inhospitable climatic conditions…. Costs of living are as much as four times as high as elsewhere in the Russian Federation, while costs of industrial production are sometimes higher. Introduction Having experienced a probably unprecedented economic decline throughout the 1990s, Russia finished the decade and entered the new millennium with unexpectedly good economic news. After the 70 percent drop in the ruble's value in August 1998, Russian domestic production picked up. The multiplication of world oil prices since then – between January 1999 and summer 2000, the price of oil increased from $9 to $35 per barrel, while in early 2003, on the eve of the U.S.-led invasion of Iraq, the price approached $40) – has filled Russian state coffers to an unanticipated extent, enabling the state to finance the war in Chechnya and still meets its external debt-servicing obligations as well as wages and pension arrears at home. [ABSTRACT FROM AUTHOR]

I stand above the court! The long and the short of it is that Russia, after fair and democratic elections in December of 2003, legitimately rejected democracy in favor of an updated authoritarian Soviet-type regime. Introduction It was the first of the two Russian revolutions of 1917 that gave substance to Woodrow Wilson's call for the United States to “make the world safe for democracy” through its intervention in the First World War. The sudden collapse of the Tsarist monarchy and the establishment of a liberal democratic Russian government under the leadership of Alexander Kerensky in the winter of 1917 gave credence to the hopes of American democrats that Allied military victory over Imperial Germany would usher in an age of universal democracy and with it an age of universal peace. The tide of democratic sentiment also flowed westward from the Russian capital Petrograd, where Kerensky's government, anxious to convince its British, French, and now American allies of Russia's newfound democratic allegiance, kept a grieviously weakened Russia engaged in the fourth year of war with Germany and launched ill-conceived offensives that by the summer of 1917 had resulted in the disintegration of the Russian Army as an effective combat force. Sir George Buchanan, the British ambassador in Petrograd, wondered in his diary whether it might not have been prudent of the Western democracies to have withdrawn the military pledges they had extracted from what had become a gravely weak Russia and let the country negotiate its own path out of the war. [ABSTRACT FROM AUTHOR]

Numerous bribe takers are also usually seen as corrupt. [This is wrong because] only those who have links with the organized criminal gangs can be regarded as corrupt officials. Do not mistake bribe-taking for corruption. Introduction In the previous chapter, we established that the USSR itself represented a patrimonial society, albeit one that was both more comprehensive and intensive than Tsarist Russia ever was. The distinctive fusion of communist political monopoly and Soviet state monopoly ownership of capital, in the context of a generally hostile international environment, cemented the Soviet party-state system that was to last for the better part of the twentieth century. Given the virtual asphyxiation of organized public life outside the framework of the communist party-state system, down to the apparently most innocuous levels (such as fishing clubs), the sudden collapse of that system could be expected to have the most dramatic consequences for the integrity of the economy and the society, not to mention the country's international standing. The disintegration of the USSR in 1991 thus represented the end of a fixture in Russian life, with only brief interruptions (1917–20 and the early 1600s), since the emergence of Muscovy in the course of the fifteenth and sixteenth centuries: the presence of a powerful, highly centralized, militarized, and largely unaccountable patrimonial state. Interestingly, that state disintegrated (1989–91) precisely as the international political system was becoming the least threatening in the millennium of Russian statehood. [ABSTRACT FROM AUTHOR]

Since the Thirty Years' War, no people have been more profoundly injured and diminished than the Russian people by the successive waves of violence brought to them by this past brutal century. Introduction Karl Marx famously observed that while men make history, they do not usually do so in the manner that they intend. History itself, in the form of political, economic, social, cultural, and other historical influences or legacies, decisively shapes the range of public choice realistically available to leaders and societies. To what extent and how has Russia's distinctive historical experience in the Soviet period – which lasted for three-fourths of the twentieth century (compared to twelve years for Nazi Germany) – shaped the country's postcommunist circumstances and possibilities? The Soviet Union that emerged from the Russian Revolution developed a patrimonial society that was both more comprehensive and more intensive than that of Tsarist Russia at least since the freeing of the gentry from obligatory service to the crown under Catherine the Great. The fusion of de facto sovereign power in the form of the communists' monopoly of political power with the communist state's monopoly of virtually all forms of capital in the state-owned economy both reflected and propelled a level of international hostility that served to justify the Soviet patrimonial party-state system itself. [ABSTRACT FROM AUTHOR]

Few Latin American countries have witnessed a cycle of contention as lengthy and as intense as that of El Salvador in the late 1970s going into the early 1980s. Nor have many witnessed a sharper confrontation between a highly mobilized mass movement and a state willing to kill unarmed civilians as necessary in order to defeat its challengers. What is less well known is that within just a few years of the crushing of El Salvador's nonviolent contentious movement, a new protest cycle developed again in the mid-1980s in the capital. And, of course, throughout the 1980s a civil war raged that even after a decade of fighting found neither side able to defeat the other. This chapter will give close attention to the relationship between contention and repression in El Salvador, utilizing datasets for both sides of the relationship that, while not as complete as those used for Guatemala, are far better than those commonly utilized for such studies. The final section of this chapter then closes the study by analyzing the contention/repression relationship at the level of the individual. Precursor Movements This analysis of the relationship between cycles of contention and repression in El Salvador is organized by the same hypotheses utilized in the prior chapter on Guatemala. As with its larger neighbor, this analysis will show that there is a close fit between these hypotheses and the Salvadoran experience, as seen both with events data and with conventional accounts of the periods under examination. Repression by authoritarian regimes – along with other means of limiting access to the political system – normally keeps nonviolent protest at a minimal level. [ABSTRACT FROM AUTHOR]

We began with the question, Why Poland? The answer in Chapter 1 was based on comparing the pace and early success of the Polish reforms, both economic and political, with those of other transitional countries. The comparisons suggested that Poland was a relative success, at least in the initial years, and that we could learn important lessons about transitions from studying the Polish transformation in detail. This chapter addresses the same question, but with a different meaning. We can now interpret the question in terms of what factors explain Poland's relative success. We have observed and analyzed in great detail the more and less successful aspects and consequences of Poland's transition. According to this interpretation, the answers are unique in some respects but broadly general in others. The challenge is to examine factors contributing to the Polish transition in the context of other political economies in Central and Eastern Europe. LESSONS FROM THE POLITICAL ECONOMY OF TRANSITION The answer begins with the two main lessons from our study. Our analysis suggests that Schumpeter's model of economic development, though nearly a century old, is applicable in a broad range of settings. Successful development and transitions depend on what he called the creative destruction process in which firms with outdated technologies, organizational structures, or products are replaced by new enterprises embodying new forms. The presence and growth of these new enterprises stimulates a political constituency that supports liberal policies and continued economic reform. [ABSTRACT FROM AUTHOR]

Immediately after the collapse of communism in Europe, many students of international relations predicted a return to balance-of-power politics among the great European powers. Others foresaw new balancing between the United States and Europe as the international system moved from a bipolar order to a multipolar world. A decade later, the distinguished observer Joseph Joffe argued that Western Europe and Russia might join together to offset American power: “Ten years after victory in the cold war, the United States is still No. 1 by any conceivable measure. But the lesser actors – Russia, Europe, China – are beginning to make true what history and political theory have predicted all along: Great powers will generate ‘ganging up.’ Nos. 2, 3, and 4 will seek to balance against Mr. Big.” And a recent book by a leading Europe scholar, Charles Kupchan, predicts that a united Europe will emerge as America's main long-term strategic challenger. Joffe, Kupchan, and other realists like John Mearsheimer and Kenneth Waltz eventually may be right. Perhaps the German, French, and Russian coalition during the 2003 Iraq war is just the beginning. In the future, realpolitik and balance of power may return as the organizing principles of international politics on the European continent. Someday, the “lesser” powers may seek to balance against the United States. To date, however, what is more striking is how wrong these realist predictions since 1989 have proven to be. [ABSTRACT FROM AUTHOR]

So when does an idea's time come? The answer lies in the match between idea and moment. An idea's time arrives not simply because the idea is compelling on its own terms, but because opportune political circumstances favor it. In 1989–90, the communist regimes of Eastern Europe fell. In a few countries, social movements had challenged and eroded communism; in other places, the regimes seemed to collapse of their own weight. In either case, however, the notion of becoming a normal European state was an idea whose time had come. Almost all the new governments that emerged looked to distance themselves from many communist-era practices and institutions. Elites and citizens generally thought of these changes as part of a “return to Europe.” Even those who argued that one could not “return” to a place (Europe) that one had never left still acknowledged the need for radical changes. Within a few years, elites and citizens also came to a broad consensus that their states should aspire to join the European Union (EU) and the North Atlantic Treaty Organization (NATO), and many subsequent institutional changes were pursued with these goals in mind. This book analyzes Central and Eastern European (CEE) states' efforts to return to Europe by trying to become members of the EU and NATO. Unlike available accounts of the “dual enlargement,” it pays particular attention to the proclivity of CEE elites to emulate existing institutions from Western Europe. [ABSTRACT FROM AUTHOR]

At the turn of the twenty-first century, the merits of international financial integration are under more forceful attack than at any time since the 1940s. Even mainstream academic proponents of free multilateral commodity trade, such as Jagdish Bhagwati, argue that the risks of global financial integration outweigh the benefits. Critics from the left such as Lord Eatwell, more wary even of the case for free trade on current account, claim that since the 1960s “free international capital flows” have been “associated with a deterioration in economic efficiency (as measured by growth and unemployment).” Such a resurgence of concerns about international financial integration is understandable in light of the multiple crises seen since the early 1990s in Western Europe, Latin America, East Asia, Russia, and elsewhere. Supporters of free trade in tangible goods have long recognized that its net benefits to countries typically are distributed unevenly, creating domestic winners and losers. Recent international financial crises, however, have submerged entire economies and threatened their trading partners, inflicting losses all around. International financial transactions rely inherently on the expectation that counterparties will fulfill future contractual commitments; they therefore place confidence and possibly volatile expectations at center stage. These same factors are present in purely intranational financial trades, of course, but the relatively higher costs of trading goods and assets internationally make the adjustments to market shocks more costly. Furthermore, problems of oversight, adjudication, and enforcement all are orders of magnitude more difficult among sovereign nations with distinct national currencies than within a single national jurisdiction. And because there exists no natural world lender of last resort, international crises are intrinsically harder to head off and contain than are purely domestic ones. [ABSTRACT FROM AUTHOR]

In this chapter we complement the quantitative analysis of the previous chapters with an historical narrative that follows the evolution of the global capital market from its formative stages in the late nineteenth century. How did the market evolve to such levels of sophistication and geographical extent by the period 1870–1913? Why did it then decline so dramatically in the first half of the twentieth century, from 1914 to the 1940s? And why was the pace of rebuilding so slow in the postwar era? Where do we stand now, at the start of the twenty-first century? And how do the economic, historical, and political events of the twentieth century inform these questions? Capital without constraints: The gold standard, 1870–1931 The classical gold standard era The story begins with the emergence of a global gold-standard monetary regime in the 1870s and 1880s and the rise of a world capital market centered on the key financial center of that era, London. The story of the convergence by many different nations on a single monetary standard is now well know, and it exhibits all of the “network externality” properties. Of course, those same increasing-returns aspects driving the adoption of this institutional device, the gold standard, made it also equally susceptible to extinction in the event of crisis and suspension, as we shall see. Nonetheless, with British leadership, the gold standard eventually became an almost universal regime by the 1890s and 1900s, especially in the principal trading nations of the world, replacing silver and bimetallic standards along the way. [ABSTRACT FROM AUTHOR]

We might expect today's global financial market to be generally unlike other current and past markets and to approximate, and even enact, key principles of neo-classical market theory. The prevalent representation of this market as electronic, transjurisdictional, and globally interconnected indicates that more than any other type of market it is well captured by neo-classical theory. According to this account, demand and supply forces are less hindered in the case of financial markets by the frictions of time and distance and the imperfections of knowledge. Market supply and demand can thus carry more weight in the coordination and regulation of the financial sector than they are likely to in other markets and sectors. Therewith market forces can be seen to strengthen the weight of liberal dynamics in the political order. Today's global capital market is indeed a complex formation markedly different from earlier global financial markets and from other types of markets in the past and today. Largely electronic and consisting of the movement of dematerialized instruments, this market can be expected to be largely disembedded from the social worlds characterizing the functioning of most markets. Hence this market would represent old notions and their current reincarnations of the market as a depersonalized force that can further the development of contemporary capitalism. It is in fact a powerful market with vast shadow effects over just about all economic sectors, with often significant transformative force. [ABSTRACT FROM AUTHOR]

INTRODUCTION On February 13, 2002, Japanese Prime Minister Koizumi directed ministries to formulate emergency countermeasures to deflation, stating, in a press release that “while deflation has a varied background, the resolution of the immediate financial problems is indispensable to overcoming deflation” (italics added). Koizumi linked deflation, shown in Figure 9.1, to banking problems and a credit crunch, and called on the Bank of Japan to take action. The same press release goes on to state, “In particular, with regard to the disposal of non-performing loans which presently stands as a top-priority issue, actions shall be taken to achieve concrete progress in line with the ongoing process of special inspections, thereby solidifying the prospects for an early resolution of the so-called ‘non-performing loans problem.’ Meanwhile, the government shall stand ready to take any and all necessary measures to prevent a financial crisis. Overcoming deflation will require the government and the Bank of Japan to act in unison. Therefore, we turn to the Bank of Japan with the request that it act with due audacity in implementing monetary policy” (italics added; Japan Ministry of Foreign Affairs 2002). The call by the Prime Minister for the government to take emergency action reflects the concern that the deflation in Japan, if allowed to persist, would gradually erode the foundation of the economy and eventually lead to a much deeper and dramatic decline reminiscent of the Great Depression in the 1930s. Initially viewed by policy makers as a “good deflation,” price declines were now seen as a harbinger of economic collapse. [ABSTRACT FROM AUTHOR]

INTRODUCTION Over the last two decades, most industrialised and developing countries have experienced episodes of boom and bust in credit markets. These credit cycles often coincided with cycles in economic activity and asset prices. The unwinding of the imbalances built up in the boom has, in some cases, led to severe problems in the financial sector, sometimes culminating in an outright banking crisis. In Japan, the second biggest economy of the world, asset price deflations, both in equity and property, were followed by a decade of financial fragility and deflationary developments in goods prices, with consumer prices falling continuously after 1999.With short-term interest rates having reached the zero lower bound, the country appears to be trapped in a deflationary spiral out of which it finds itself unable to escape. Other South-east Asian countries, such as Hong Kong and Singapore, have also experienced asset price deflations followed by a marked drop in credit creation and goods price deflation in recent years. Some commentators argue that the United States and other industrialised countries are also now, in the wake of the worldwide slump in share prices, on the brink of deflation. Both the experience from historical episodes of financial crisis in the late nineteenth and early twentieth centuries and from recent boom–bust cycles in credit markets, suggest that consumer prices respond with a lag to developments in credit markets. Consumer price inflation is often low or falling during credit booms and peaks after the onset of the bust. Asset prices, especially property prices, on the other hand, appear to follow closely behind or even to lead bank lending. [ABSTRACT FROM AUTHOR]

INTRODUCTION Episodes of sustained declines in consumer prices have been rare since the 1930s. Recently, however, in addition to Japan's well-known ongoing experience with deflation, persistently falling consumer prices have been seen in other countries, such as Argentina, China, Hong Kong, Singapore, and Taiwan. Indeed, international success in reducing inflation by the mid-1990s was quickly followed by fresh fears of deflation. Deflation may be “worse” than inflation because of firms confronting rising real wages should nominal wage rigidity prevail. In the United States, Federal Reserve Bank of Richmond President J. Alfred Broaddus, having cast more dissents than anyone else in favor of tighter monetary policy in Federal Open Market Committee (FOMC) meetings in the past decade, recently stated that it would be “ironic to have fought all this time to bring the inflation rate down … and then lose price stability on the down side” (see Ip 2002: p. A1). Meanwhile, the FOMC meeting of May 6, 2003, gave official notice of the Fed's concern that “the probability of an unwelcome substantial fall in inflation, though minor, exceeds that of a pickup in inflation from its already low level.” As Ip (2003: p. A1) points out, this represented “a profound shift from half a century of preoccupation with fighting inflation.” In the euro area, deflation is a distinct possibility in some of the major economies, especially in Germany (International Monetary Fund 2003). [ABSTRACT FROM AUTHOR]

Have it as you will. In the 1970s, the Community was ground between the hither and nether millstones, stuck between a rock and a hard place, flattened between exogenous pressure from above and endogenous force from below. It was, so to speak, sandwiched. Pressed between the two thick slabs of bread were a thin slice of processed ham, a single soggy piece of lettuce, browning and curled at the edges, and a solitary smear of butter. Who could be blamed for not wanting a bite? Cast aversion and distaste aside. Lend an ear. The struggling Community was stuck between the world monetary disorder that bore down on it from above and the thickening mass of national protectionism that swelled up from below. The two left little wiggle room for the Commission, the Council, or the court stuck in between. The co-editor of the decade's standard work on the EC concluded that the policy context of the European Economic Communities seems [close] to that identified by Lindblom in his “muddling through model” of public policy making … [whose tendency is] to prefer maximizing security to radical and comprehensive innovation, [and] … the policy process as a whole [is] characterized by incrementalism and a high degree of continuity. Is that a surprise? Is there anything to add to the elegant formulation of this eminent Yale political scientist? The results were, under the harsh conditions of the era, actually a bit better than muddling through. [ABSTRACT FROM AUTHOR]

“Re-launching of Europe” is the phrase coined to capture the spirit of the lengthy round of diplomacy that began at Messina, Sicily, on 1 June 1955. It opened less than a year after the EDC fiasco and concluded, after the initialing of the Treaty of Rome on 25 March 1957, with the establishment of the machinery for a future customs union – the European Economic Community, or Common Market – on 1 January 1958. The term “re-launching,” or “re-launch” as it is sometimes translated from the French rélance, is no misnomer: The first ship to embark, with Schuman Plan on its prow, had gone aground and so a second one of improved design, the Messina, set out five years later, heading off in another direction – toward market liberalization. No one knew how to find the destination, whether the vessel in question would be sturdy enough to get there, or whether a still stouter tub, following a somewhat better tack, might arrive first. The fog of uncertainty would not soon lift. Europe was becoming liberal, more or less, but the course was not set. Doubt would remain the rule even after 1960, when a competitive yet cooperative European Free Trade Association (EFTA) came into being as a potential rival, co-partner, or merger candidate of the EEC. Outcomes would be determined by economic trends, the continuation of the boom under way; by high politics, the European states' relationships with each other and with the United States; and by the personalities and policies of officeholders in Washington, Paris, London, Bonn, and Brussels. [ABSTRACT FROM AUTHOR]

Jean Monnet has a strong claim to be called the Father of Europe. Monnet deserves almost single-handed credit for creating in 1951 the first of Europe's epochal institutions for integration, the European Coal and Steel Community (ECSC). He was also the power behind the grandiose but ill-fated European Defense Community (EDC), a scheme for an integrated armed force composed of multinational units and tied into the NATO command structure that was rejected by France in the summer of 1954. Jean Monnet was, in addition, the moving force behind EURATOM (European Atomic Energy Commission) – a proposal for a continental nuclear power industry – which he put forth in conjunction with the “re-launching” of Europe in 1955. Unlike EDC, EURATOM would not be dead on arrival; instead, along with the ECSC, it would develop into an organ (though only an appendage) of the European Economic Community (EEC). As president from 1954 to 1975 of the Action Committee for the United States of Europe, a lobby for the integration cause, Monnet would be an inexhaustible font of unification and federation initiatives. Yet after the mid-1950s he was reduced to the status of an outsider and could influence the integration process only indirectly through allies in Washington, Bonn, Brussels, and other capitals. Thereafter, many initiatives associated with Monnet stemmed from self-anointed disciples – “monnetists” – acting (sometimes without specific authorization) on his behalf in a manner thought to be consistent with his “spirit.” [ABSTRACT FROM AUTHOR]

The period between the summer of 1964 and the autumn of 1965 saw the position of the Western powers in South East Asia transformed once more. From the British perspective, they now approached the region no longer as a power with formal colonial interests and responsibilities, but as one tied to the area by treaty commitments, a sense of obligation to regional friends and the need to preserve and show solidarity with the Americans. British relations with Kuala Lumpur were subject to the kind of strains experienced in 1963, but in even more pronounced fashion, as the Malaysian Government ran the affairs of the new Federation in ways that offended London's sensibilities and seemed to threaten the fragile sense of national unity that had been established by the conflict with Indonesia. Indeed, the old colonial ties and patterns of thinking were being supplanted in Malaysian official circles by a greater willingness to demonstrate independence from the overbearing advice and presence of the British (though the need to maintain close ties for the purposes of security was still widely and uncomfortably acknowledged). This was a situation the British did not relish but had anticipated since at least the late 1950s, having never taken the preservation of a moderate and pro-Western UMNO leadership for granted. By the mid-1960s, that conservative leadership still held sway under the Tunku, but its future disposition could not be assured, leading many to question how long the obtrusive British bases could be maintained before local hostility was generated and they were driven out. [ABSTRACT FROM AUTHOR]

The idea of a negotiated resolution to the tensions produced by the formation of Malaysia was certainly welcome to the architects of the Kennedy Administration's accommodating approach to Indonesia. There would be little likelihood of assembling international backing for a package of financial assistance for the Indonesian economy when the leadership in Jakarta was promoting insurgency against its Western-orientated Malayan neighbour and indulging in virulent anti-imperialist rhetoric. Moreover, the Indonesian Government was responding only slowly to the IMF's conditions that a stabilization plan, involving a real effort to reduce expenditures and balance the budget, should be put in place before large-scale Western financial help to ease chronic shortages of foreign exchange could be authorized. Compounding this difficulty was the fact that strong criticisms within the United States were now being directed at the Administration's handling of relations with Indonesia, and in particular, its readiness to extend further aid to Sukarno's regime. Much to the consternation of US officials, in March 1963 the Clay Committee had delivered its comprehensive and critical report on the foreign aid programme. This investigation had been instigated by President Kennedy after the congressional mauling inflicted on the 1962 aid bill, and widespread dissatisfaction with the work of the Agency for International Development. The expectation had been that a specially selected panel, including several business-minded and conservative members, under the respected guidance of General Lucius Clay, would look over existing programmes with a faintly critical eye, and then reach the considered verdict that they were necessary to national security. [ABSTRACT FROM AUTHOR]