International

 Monetary  Fund  
Cr  
CRITICISM:  FACT  OR  FICTION    
The  Case  of  Nicaragua  
C  
 
Elisa  Barrios          
James  Jusseaume        

 
David  Leyton  
Claudia  Mendoza    
Stephanie  Zambrana  
   
 
 
 

A v e   M a r i a   U n i v e r s i t y   –   L a t i n   A m e r i c a n   C a m p u s  
  

TABLE  OF  CONTENTS  

 
TABLE  OF  CONTENTS   2  
Abstract   3  
I.  Introduction:  Organization  and  Purpose   4  
IMF:  Overview/History   4  
Purpose   4  
II.  Conditionality   5  
Privatization   5  
What  is  Privatization?   5  
Criticism   6  
IMF  Response  to  the  Criticism   6  
Case  of  Nicaragua:  Transition  from  ENEL  to  UNION  FENOSA   7  
Analysis:    Why  Did  Privatization  fail  in  Nicaragua?   9  
Recommendations   10  
Fiscal  Prescriptions   10  
Criticism   10  
Analysis  and  Recommendations   13  
IMF  Response   14  
Application  in  Nicaragua   15  
III.  Taxation  without  Representation   16  
I.  Introduction:   16  
A.  Background  of  taxation  with  representation  in  the  domestic  system.   16  
B.  Background  of  taxation  without  representation  in  the  IMF.   16  
II.  IMF’s  Criticism  in  regard  to  voting  power  of  member  states  in  relation  to  taxation  without  
representation   16  
A.  Proportional  Voting  Structure   16  
B.  Allocation  of  Votes   18  
i.  The  IMF  Response   18  
ii.  Counter  argument:   19  
III.    Nicaragua’s  application  to  the  Criticism   19  
A.  Proportional  Voting  Structure   19  
B.  Allocation  of  Votes   20  
IV.  Analysis   21  
A.  Proportional  Voting  Structure   21  
B.  Allocation  of  Votes   21  
C.  Recommendations   22  
IV.  CONCLUSION   22  
REFERENCE  LIST   23  
 
 
 
 
 
 
 
 
 

  2  
  

Abstract  
 
The   following   document   provides   a   short   introduction   about   the   IMF   including   an   overview,  

history  and  purpose  of  the  organization  starting  from  its  creation,  until  the  work  as  it  does  

today.   Further   on   it   engages   in   two   main   criticisms   against   the   IMF:   the   Issue   of  

Conditionality  and  Taxation  without  representation.    To  maintain  the  balance  it  also  includes  

the   response   or   rebuttal   to   these   criticism   by   the   Fund   It   analyses   additionally   the   effect  

these   criticism   have   had   in   Nicaragua,   initially   subdividing   the   issues   of   conditionality   in  

Privatization  policies  and  Fiscal  prescriptions  provided  by  the  IMF  to  this  country.    

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  3  
  

I.  Introduction:  Organization  and  Purpose  

IMF:  Overview/History  
The   International   Monetary   Fund   (IMF)   was   created   in   1944,   at   the   Bretton   Woods  

conference  (IMF,  n.d.).  The  founders  aimed  to  build  a  framework  for  economic  cooperation  

that  would  avoid  a  repetition  of  the  disastrous  economic  policies  that  had  contributed  to  the  

Great  Depression  of  the  1930s  and  the  global  conflict  that  followed  (Ibid,  n.d.).  The  IMF  is  an  

organization  formed  with  a  stated  objective  of  stabilizing  international  exchange  rates  and  

facilitating  development.  It  also  offers  highly  leveraged  loans  (Ibid,  n.d.).    The  IMF  is  uniquely  

placed   to   help   member   governments   take   advantage   of   the   opportunities   and   manage   the  

challenges  posed  by  globalization  and  economic  development  more  generally  (Ibid,  n.d.).  The  

IMF   tracks   global   economic   trends   and   performance,   alerts   its   member   countries   when   it  

sees   problems   on   the   horizon,   provides   a   forum   for   policy   dialogue,   and   passes   on   know-­‐

how  to  governments  on  how  to  tackle  economic  difficulties  (Ibid,  n.d.).

Purpose  

In addition the IMF's main purpose is to provide a forum for cooperation on international

monetary problems; facilitate the growth of international trade, thus promoting job creation,

economic growth, and poverty reduction; promote exchange rate stability and an open system of

international payments; and lend countries foreign exchange when needed, on a temporary basis

and under adequate safeguards, to help them address balance of payments problems (IMF, n.d.).

The IMF provides policy advice and financing to members in economic difficulties and also works

with developing nations to help them achieve macroeconomic stability and reduce poverty (Ibid,

n.d.). Finally, the IMF supports its membership by providing: policy advice to governments and

central banks based on analysis of economic trends and cross-country experiences; research,

statistics, forecasts, and analysis based on tracking of global, regional, and individual economies

and markets; loans to help countries overcome economic difficulties; concessional loans to help

  4  
  
fight poverty in developing countries; and technical assistance and training to help countries

improve the management of their economies (IMF, n.d.).

II.  Conditionality  
Conditionality is a concept in international development, political economy and

international relations and describes the use of conditions attached to a loan, debt relief, bilateral

aid or membership of international organizations, typically by the international financial

institutions, regional organizations or donor countries (Buira, 2003). However, Conditionality is

perhaps the most controversial aspect of IMF policies (Ibid, 2003). Among the traditional

criticisms of Fund conditionality focuses mainly on demand management and does not pay

adequate attention to its impact on growth, and the effects of programs on social spending or on

income distribution (Ibid, 2003). In particular, fiscal and monetary policies where the core of

programs, are seen as too restrictive and have a strong deflationary impact to the point where the

essence of the correction of the external payments imbalance come from sheer deflation (Ibid,

2003).

The criticisms of Fund conditionality have also tended to center on its loss of focus, on

imposing an excessive number of structural conditions and trying to do too many things at the

same time, of expanding Fund influence beyond its area of competence. The Meltzer Report states

“detailed conditionality (often including dozens of conditions) has burdened IMF programs in

recent years and made such programs unwieldy, highly conflictive, time consuming to negotiate,

and often ineffectual.”

Privatization  

What  is  Privatization?  

Privatization  is  the  transfer  of  assets  or  service  delivery  from  the  government  to  the  

private   sector.   Privatization   runs   a   very   broad   range,   sometimes   leaving   very   little  

government   involvement,   and   other   times   creating   partnerships   between   government   and  

  5  
  

private   service   providers   where   government   is   still   the   dominant   player.   It   refers   to   the  

shifting   of   the   production   of   a   good   or   the   provision   of   a   service   from   the   government   to   the  

private  sector,  often  by  selling  government-­‐owned  assets  (US  Accounting  Office,  2009).  The  

broader  definition  of  privatization  also  includes  a  wide  range  of  public-­‐private  partnerships,  

such   as   voucher   systems.   Even   the   creation   of   federal   corporations,   quasi   government  

organizations   and   government-­‐sponsored   enterprises   is   often   filed   under   the   general  

category   of   privatization.   In   such   organizations,   though,   it   is   often   difficult   to   tell   where  

government  ends  and  the  private  sector  begins  (ibid).    

Criticism  

The   IMF   has   been   often   criticized   for   the   privatization   policies   it   imposes   in   their  

member  states.  The  criticized  aspect  of  privatization  is  that  governments  sell  off  State  owned  

enterprises   to   the   highest   bidder   rather   than   ensuring   that   the   state   monopoly   is   not   just  

replaced  with  a  private  monopoly.  Main  reason  why  some  states  are  against  these  policies  is  

because  of  the  dangers  of  rapid  privatization  of  state  industries.  Basically  a  rapid  transition  

is  suitable  for  corruption.  Often,  state-­‐controlled  sectors  are  sold  to  the  bureaucrats  who  run  

them   or   to   their   political   associates.   A   combination   of   politics   and   business   has   led   to  

widespread   corruption.   Such   fraudulent   privatization   eliminates   the   supposed   benefit   of  

competition   and   produces   windfall   gains   and   gaping   income   disparity,   the   worst   effects   of  

capitalism  (Stiglitz,  2002).  When  privatization  proceeds  in  the  absence  of  similar  institutions  

the  result  is  financial  anarchy,  a  lawless  state  where  the  wealthiest  and  most  ruthless  break  

laws  with  impunity  (ibid).  

IMF  Response  to  the  Criticism  

The  Fund  provides  two  main  reasons  why  privatization  is  a  positive  thing.  The  first  

one   is   growth,   basically   microeconomic   evidence   indicates   that   private   firms   are  

  6  
  

operationally   more   efficient   than   those   held   by   the   state,   particularly   in   competitive  

industries    (Davis  et  al,  2005).  A  strong  correlation  is  also  found  for  the  case  study  countries  

between   privatization   and   growth.   However,   and   consistent   with   the   growth   literature,  

privatization  is  likely  serving  as  a  proxy  in  the  regressions  for  one  or  more  missing  variables  

that   may   broadly   be   characterized   as   a   favorable   regime   change   (ibid).   Secondly,   Labor  

Markets,  public  enterprises  often  seek  to  maintain  employment,  and  benefit  from  a  limit  to  

spending  by  some  public  body.  Consequently,  there  is  concern  that  privatization  may  lead  to  

increased   unemployment.   Although   empirical   evidence   suggests   that   aggregate  

unemployment  tends  to  decrease  following  privatization,  particular  groups  of  workers  may  

still   be   adversely   affected.   This   lends   importance   to   measures   that   alleviate   its   social   impact  

(ibid).   The   state   no   longer   has   to   invest   in   sectors   like   water,   electricity,   electricity   and  

telephone,   while   it   gives   a   concession   to   private   companies   to   distribute   these   services  

within   a   regulated   market.   Leading   to   greater   stability   and   economic   efficiency   and   allows  

the   state   to   direct   resources   to   other   important   needs   like   health   and   education   (Carrion,  

2006).  

Case  of  Nicaragua:  Transition  from  ENEL  to  UNION  FENOSA  

In  the  early  90s  the  IMF  demanded  reforms  to  the  “Energy  Stability  Law”  in  order  to  

prevent   it   from   having   control   over   fuel   prices   and   to   other   regulations   constraining   the  

exercise  of  monopoly  power  by  oil  companies  that  import,  refine,  store  and  distribute  fuels  

(Acevedo,   2006).   Nicaragua's   government   and   the   International   Monetary   Fund   (IMF)  

ratified   the   country's   new   Structural   Adjustment   Program   (ESAF),   which   included   a  

comprehensive  privatization  program  in  the  telecommunications,  electricity  and  oil  sectors  

(Business   News   America,   1998).   The   government   planed   to   privatize   the   state-­‐owned  

telecommunications   company,   ENITEL,   and   part   of   the   generation   and   distribution  

operations  of  energy  company  ENEL  (ibid).    

  7  
  

The   privatization   process   that   started   in   2000   with   a   public   offering   of   the   four  

companies  was  complicated  due  both  to  legal  problems  and  to  lack  of  interest  by  investors  

(Acevedo,  2006).  As  a  result,  ENEL  maintained  a  more  relevant  role  than  initially  expected.  

HIDROGESA  remained  in  public  hands  as  the  only  player  in  hydroelectric  generation  while  

its  profits  serve  to  finance  the  losses  of  GECSA,  which  owns  the  thermal  plants  that  did  not  

attract  private  interest,  and  the  rural  electrification  plans  in  isolated  areas  (Carrion,  2003).  

The   reforms   of   the   1990s   did   not   achieve   their   objectives.   It   had   been   expected   that  

privatization  would  bring  investment  in  new  generation,  but  very  little  capacity  was  added  

in  the  years  that  followed  the  reform  (ibid).  Moreover,  the  generation  capacity  added  in  the  

last   decade   has   been   mainly   dependent   on   liquid   fuels,   making   the   country   more   vulnerable  

to   rising   oil   prices.   In   addition,   as   mentioned,   distribution   losses   have   remained   at   very   high  

levels   (28%).   The   reform   also   aimed   at   implementing   gradual   changes   in   electricity   tariffs  

that  would  reflect  costs,  which  proved  to  be  politically  unfeasible.  

When   oil   prices   increased   from   2002   onwards,   the   regulator   failed   to   approve  

electricity   tariff   increases,   because   they   were   expected   to   have   been   very   unpopular.   The  

financial   burden   of   the   higher   generation   costs   was   thus   passed   on   to   the   privatized  

distribution  company,  which  has,  partly  as  a  result,  been  suffering  severe  losses.    

In  2006,  the  electricity  sector  in  Nicaragua  suffered  a  serious  crisis,  with  4–12-­‐hour  

blackouts  that  affected  virtually  the  whole  country  (Relea,  2006).  The  distribution  company  

owned  by  Unión  Fenosa,  was  blamed  and  the  concession  was  temporarily  cancelled  by  the  

government,   which   called   for   arbitration   (ibid).   This   led   Union   Fenosa   to   call   its   MIGA  

(Multilateral  Investment  Guarantee  Agency)  guarantee.  The  crisis  was  further  aggravated  by  

the   inability   of   INE   and   CNE   to   cooperate   in   a   constructive   manner   (MIGA,   2006).   The  

emergency  situation  improved  in  2007  due  to  the  installation  of  60MW  of  diesel  generation  

capacity  financed  by  Venezuela.  

  8  
  

Analysis:    Why  Did  Privatization  fail  in  Nicaragua?  

The   general   idea   is   that   electric   power   was   a   state   monopoly   that   ran   inefficiently.  

Supposedly,   by   privatizing   Union   Fenosa,   they   would   invest   money   in   the   service,   and  

encourage   the   private   sector   to   produce   electrical   power   (this   had   begun   to   happen   before).  

The   main   issue   was   that   the   state's   monopoly   was   expensive   and   many   places   didn’t   get  

electric   energy.   Basically,   Union   Fenosa   was   expected   to   sell   cheaper   energy   and   provide  

people  with  better  service.  However,  as  seen  today  energy  is  more  expensive  and  it  has  not  

reached   more   people.   Electricity   prices   in   Nicaragua   increased   between   1998   and   2005.  

12%  for  residential,  26%  for  commercial  and  23%  for  industrial  tariffs,  meaning  that  Union  

Fenosa  had  quite  the  opposite  effect  in  relation  to  the  price  of  energy.    

The   problem   was   that   it   was   just   a   transfer   of   a   public   monopoly   to   a   private   one.   An  

independent  monopoly,  regardless  if  its  state  or  private,  it  must  have  a  state  regulator,  but  

one  was  not  applied  to  Union  Fenosa,  given  that  the  regulator  was  ENEL,  and  it  is  handled  by  

the   assembly   with   political   criteria   (Defranco,   2009).   Monopolies   by   their   nature   have  

market   power   to   set   prices   and   quantities,   and   in   that   sense   they   are   inefficient.   The  

problem   was   not   so   much   the   privatization   but   the   inability   to   regulate,   in   part   by   the  

politicization,  but  also  because  electric  power  is  a  complex  industry,  and  it  requires  technical  

capacities   that   the   country   lacks   (ibid).     The   privatization   process   was   controversial.  

Another  reason  for  the  failure  of  the  privatization  of  energy  in  Nicaragua  is  that  only  10%  of  

customers   pay   the   electricity   bill.   Robberies,   assaults   on   offices   and   warehouses   of   Union  

Fenosa,  kidnapping  brigades  of  the  company,  network  manipulation,  extortion  are  common  

felonies  reported  by  the  directors  of  the  company  (Relea,  2007).    There  is  a  debt  of  over  two  

million  dollars  and  includes  rich  and  poor.  In  Nicaragua  electricity  fraud  is  not  a  crime,  so  it  

is   only   pursued   administratively.     Basically,   the   reasons   for   the   failure   of   privatization   are  

political   and   constitutional,   proving   in   fact   that   privatization   as   an   economic   prescription     is  

not  a  failure.  

  9  
  

Recommendations  

Many   countries   have   proposed   alternatives   to   the   privatization   of   public   services  

such  as  water  and  energy.  A  semi-­‐private  association  of  companies  holding  public  services  

with   the   government,   in   a   way   that   prices   are   kept   low,   but   competition   is   encouraged   in  

order   to   keep   good   quality   of   service.   Government   could   have   subcontractors,   2   or   more  

branches   of   private   enterprises   (Urrea,   2008).   Mixed   companies   51   %   state   49%   private  

exist.,  so  there  is  additional  capital  on  the  private  side,  and  also  the  transparency  that  they  

require,   where   the   state   has   full   say   and   the   public   can   influence   the   state,   incorporating   the  

principle  of  checks  and  balances.    

Fiscal  Prescriptions  

Criticism  

Fiscal  policy  is  the  use  of  government  spending  and  taxation  to  influence  the  economy  

(Weil).   Whenever   the   government   engages   in   the   purchase   of   goods   and   services,   the  

transfer  of  payments,  or  the  collection  of  taxes,  it  is  engaging  fiscal  policy  (Ibid).  Fiscal  policy  

is   said   to   have   a   neutral   stance   whenever   Government   Spending   =   Tax   Revenue;   that   is,  

government   spends   what   it   earns   (Cliffnotes,   2009)   (Ibid,   2009).   Similarly,   a   loose   or  

expansionary  policy  is  when  spending  is  higher  than  revenue  (i.e.,  the  budget  is  in  deficit).  In  

addition,   fiscal   policy   is   considered   as   be   tight   or   contractionary   when   revenue   is   higher  

than  spending  (i.e.,  the  government  budget  is  in  surplus)  (Ibid,  2009).  

Historically,   the   IMF   has   recommended   a   conservative   fiscal   policy,   that   is,   a  

contractionary   or   deflationary   fiscal   policy   (Dreher,   2005).   As   explained   before,   this   leads  

and  involves  lowering  the  federal  budget,  paying  off  national  debt,  and  acquiring  a  balanced  

budget   and   is   basically   done   by   either:   reducing   government   spending   increasing   taxes  

(Weil).  Thus,  for  example,  when  the  government  raises  taxes,  consumers  are  forced  to  put  a  

  10  
  

larger   portion   of   their   income   toward   taxes,   and   thus   disposable   income   falls,   there   is   less  

consumption   and   inflation   falls.   When   the   government   reduces   government   spending,   the  

recipients  of  government  spending,  the  populace,  have  less  disposable  income.  

Despite   these   advantages,   critics   argue   that   the   IMF's   advice   on   fiscal   policy   reduce  

growth  and  increase  poverty  in  developing  countries  (IMF,  2003).  The  argument  goes  that  in  

the   search   for   a   balanced   budget   and   the   elimination   of   public   deficit,   the   IMF   advises  

countries   to   make   substantial   cuts   in   public   spending   that   end   up   affecting   the   poor   (Ibid,  

2003).  Consequently,  “far  from  cushioning  the  impact  of  crises  on  the  poor,  these  cuts  slow  

down   the   economy   and   make   it   more   difficult   for   the   poor   to   find   jobs”   (Ibid,   2003).   Thus,   a  

lower   investment   (or   spending)   will   lead   to   a   lower   capital   stock   and   to   a   reduction   in   a  

country’s   ability   to   produce   output   in   the   future.     Similarly,   they   add   that   by   decreasing  

government   spending   or   increasing   taxes,   one   hurts   the   poorest   which   are   the   ones   that  

need  their  basic  need  guaranteed  (Dreher,  2005).  For  example,  by  increasing  taxes  on  basic  

foods  such  as  rice  and  beans,  government  hurts  the  poor  by  leaving  them  with  less  money.  

Similarly,  by  cutting  salaries  (cutting  espenditures)  for  public  employees  such  as  teachers  or  

doctors,   one   reduces   their   disposable   income   and   their   capability   to   contribute   to   the  

economy.      

The   secondary   criticism   claims   that   the   IMF   programs   for   low-­‐income   countries  

continue   to   restrict   governments'   choices   of   how   to   manage   their   own   budget   (Jubilee,  

2003).   These   conditions   give   the   IMF   the   power   to   dictate   spending   levels   in   a   number   of  

sensitive  sectors  (Ibid,  2003).  Facts  are  that  often  the  IMF  conditions  their  loans  by  saying  

that   only   certain   types   of   government   spending   or   taxation   is   allowed   (Ibid,   2003).   For  

example,  the  IMF  may  say  that  in  order  to  be  eligible  to  a  loan,  government  must  not  tax  on  

the  imports  of  textiles.  In  addition,  some  venture  saying,  that  this  is  the  mechanism  though  

which  the  IMF  favors  big  multinational  companies  and  the  interests  of  industrialized  nations  

(Dreher,   2003).   On   the   other   hand,   there   are   those   who   argue   that   a   higher   level   of  
  11  
  

government  spending  and/or  lowering  of  taxes  is  preferable  (Riley,  2006).  Thus,  according  

to   them,   government   borrowing   can   benefit   economic   growth   (Ibid,   2006).   As   Brown  

University   Professor   Geoff   Riley   describes,   “a   budget   deficit   can   have   positive  

macroeconomic  effects  in  the  long  run  if  it  is  used  to  finance  extra  capital  spending  that  leads  

to   an   increase   in   the  stock   of   national   assets”   (Ibid,   2006).   For   example,   spending   on   the  

transport   infrastructure   improves   the  supply-­‐side   capacity   of   the   economy.   Similarly,  

increased  investment  in  health  and  education  can  bring  positive  effects  on  productivity  and  

employment  (Ibid,  2006).  

The   argument   follows   that   if   there   is   market   failure   in   the   economy   such   as   under  

provision   of   education   or   public   transport,   the   government   should   increase   spending   on  

these  public  services  (Ibid,  2006).  In  the  short  run  this  may  cause  a  deficit,  however,  if  they  

increase  productivity  then  in  the  future  there  will  be  a  higher  rate  of  economic  growth  and  

more   tax   revenues   (Ibid,   2006).   In   other   words,   in   the   long   term,   higher   spending   on  

education,  and  to  a  lesser  extent  health  care,  may  cause  an  increase  in  labor  productivity  and  

economic  performance.    

By  running  an  expansionary  fiscal  policy,  government  can  help  restore  output  to  its  

normal   level   and   to   put   unemployed   workers   back   to   work   by   either   spending   more   or  

reducing  taxes   (Jubilee,   2008).  Government   spending   may  range   from   buying   paper  clips,   to  

raising   teacher’s   salaries   to   building   highways   and   so   on.   The   argument   goes   that   the  

spending   process   stimulates   the   economy   by   providing   society   with   more   money   to   spend  

on,  which  translates  on  more  jobs,  better  salaries  etc  (Ibid,  2008).  Similarly,  the  reduction  of  

taxes  is  said  to  stimulate  the  economy  by  providing  families  with  more  money  to  spend  on  

(Ibid,   2008).   Regarding   the   issue   of   the   IMF   imposing   what,   how   and   when   to   spend   a  

government’s   money,   critics   are   very   clear   on   this.   It   should   be   the   other   way   around;  

governments  are  to  dictate  what  their  priorities  are  and  what  they  want  to  spend  on  or  tax  

(Richards,   2007).     In   other   words,   they   claim   that   the   IMF   should   have   no   role   in  
  12  
  

determining  what  should  be  spent  on  or  less,  and  what  to  tax  or  not.  Similarly,  some  venture  

further  by  saying  that  the  IMF  violates  the  sovereignty  and  self-­‐determination  of  nations  and  

governments  to  dictate  how  to  manage  their  public  finances  (Ibid,  2007).    

Analysis  and  Recommendations  

It  is  clear  that  the  fiscal  policy  actions  recommended  by  the  IMF  are  directed  at  achieving  

long-­‐term   sustainability   of   public   finances   to   maintain   low   inflation   levels   and   stimulate  

economic   growth   and   are   thus,   beneficial.   However,   the   one-­‐size   fits   all   paradigm   of   the   IMF  

is   increasingly   creating   tensions   in   developing   countries   and   are   instead   damaging   the  

effectiveness   of   such   programs   and   the   maneuverability   of   governments   to   prioritize   their  

own  needs.  For  this  reason,  a  more  participatory  process  involving  the  domestic  government  

as  well  its  external  creditors  (including  the  IMF)  is  needed.  Such  process  would  eventually  

create  and  increase  the  participation  of  national  and  local  governments  on  how  to  evaluate  

revenues   from   foreign   and   domestic   sources   and   then   prioritize   the   expenditures   and  

improving   their   efficiency,   thus   creating   a   more   effective,   responsible   and   inclusive   fiscal  

policy.  

One   of   the   biggest   challenges   facing   policymakers   is   deciding   how   much   involvement  

government  should  have  through  fiscal  policy.  In  fact,  fiscal  policy  has  varied  throughout  the  

years,   ranging   from   conservative   constrained   fiscal   policies   to   liberal   expansive   fiscal  

policies.  However,  in  general,  it  is  accepted  that  a  certain  degree  of  government  involvement  

is   necessary   to   sustain   a   vibrant   economy   and   relief   poverty.     Depending   on   the   political  

orientations  and  goals  of  the  policymakers,  tax  cuts  and/or  government  expenditure  affect  

different  social  classes.  Even  though  there  are  some  that  state  that  expansive  fiscal  policies  

aimed   at   helping   the   higher   classes   have   an   indirect   positive   effect   on   the   poorest,   most  

government   effort   should   be   directly   aimed   at   relieving   the   poor.   These   policies   have   too  

much  of  a  drastic  effect  on  the  available  capital  for  social  services  and  reduce  the  economic  

  13  
  

activity  in  the  public  sector.    Considering  that  the  effects  of  any  fiscal  policy  are  not  the  same  

on  everyone,  fiscal  policy  should  be  directed  at  reducing  poverty.  Consequently,  in  order  to  

do  so,  and  as  the  experts  point  out,  a  responsible  expansive  fiscal  policy  is  necessary.  To  do  

so,  the  IMF  needs  to  improve  tools  for  assessing  the  sustainability  of  debts  incurred  during  

expansive   fiscal   policies   in   emerging   economies   and   take   a   longer-­‐term   perspective  

regarding   the   vulnerabilities   that   could   surface   over   the   medium   term.   Similarly,   in   order   to  

minimize   error   and   increase   effectiveness,   the   IMF   needs   to   improve   its   decision   making-­‐

process  in  terms  of  debt  risk  analysis,  accountability  and  predictability.    

IMF  Response  

IMF  response  is  based  on  the  experience  gained  from  5  crises:  the  Great Depression,  

the   Japanese   1990s   banking   crisis,   the   1997   Asian   crisis,   the   US   1980s   S&L   crisis,   and   the  

1990s   Nordic   crisis   (Natarajan,   2009).   The   Fund   believes   that   “macroeconomic   policies  

aimed   at   exchange   rate   devaluations   (for   export   promotion)   and   monetary   loosening   (to  

pump  bank  credit)  are  not  likely  to  be  effective”,  leaving  no  other  option  than  fiscal  policy  

(Natarajan,   2009).   Moreover,   the   IMF   suggests   that   fiscal   policies   should   contain   the  

following   characteristics:   timeliness,   large   in   size,   lasting   till   visible   recovery,   diversified,  

contingent,  internationally  collective,  sustainable  (Natarajan,  2009).    The  intention  of   IMF  is  

to   support   programs   for   development,   however   it   seeks   to   promote   those   than   can   be  

started  or  restarted  quickly  to  avoid  cutting  existing  programs  for  lack  of  resources;  in  order  

to  manage  public  expectations  on  top  and  to  restore  investors’  confidence  (Natarajan,  2009).  

Furthermore,   it   recommends   governments   to   stop   supporting   directly   businesses   in   the  

form  of  subsidies  and  sector  specific  bailouts,  and  to  favor  indirect  efforts  to  get  the  credit  

flowing  so  that  firms  feel  encouraged  to  not  postpone  their  investment  decisions  (Natarajan,  

2009).  

  14  
  

Application  in  Nicaragua  

According   to   Stiglitz   the   “IMF   should   foster   expansionary   economic   policy—for  

instance,   encouraging   or   enabling   increased   expenditures,   lower   taxes,   lower   interest  

rates—in   order   to   stimulate   the   economy”   (Stiglitz,   2002).   Nevertheless,   Stiglitz   declares  

that  the  IMF  has  taken  the  opposite  side:  it  provides  funds  for  countries  only  if  they  institute  

contractionary  policies  such  as  cutting  deficits,  raising  taxes,  and  raising  interest  rates,  and  

in   this   way   imposing   the   stabilization   and   adjustment   efforts   to   achieve   a   short   term  

financial  balance  (Stiglitz,  2002).  

Nicaragua   during   the   90s   could   not   make   the   investments   needed   to   restore   basic  

perspectives   for   future   development   and   poverty   reduction   because   the   programs  

recommended   by   the   IMF   abandoned   the   rural   areas   where   poverty   is   most   concentrated,  

and  dismantled  the  traditional  institutions  to  promote  agriculture  and  support  to  small  and  

medium   producers   (Neira).   One   of   the   conditions   of   the   IMF   in   order   to   keep   funding  

programs   in   Nicaragua   was   changing   existing   legislations   and   drafting   new   laws   such   as   Ley  

de   Responsabilidad   Fiscal   (Fiscal   Responsibility   Law)   and   Ley   de   Régimen   Presupuestario  

(Budgetary  Regime  Law)  (Acevedo  Vogl,  2006).  Also,  the  IMF  required  the  control  of  public  

funds   by   the   government   through   the   Economic   and   Financial   Program   sponsored   by   the  

Fund  as  an  indirect  way  to  control  funds  itself,  yet  this  program  excluded  or  cut  resources  

for   some   sensible   necessities   like   education,   health,   housing,   potable   water,   and   sanitation  

(Acevedo   Vogl,   2006).   These   restrictions   were   with   the   purpose   of   generating   budgetary  

surplus   to   validate   more   credit   contracts   so   to   obtain   more   private   investment   and   increase  

international  financial  reserves  to  strengthen  the  currency  resulting  in  stability  for  private  

investors  (Acevedo  Vogl,  2006).  

  15  
  

III.  Taxation  without  Representation  

  This  section  of  the  paper  seeks  to  examine  how  the  application  of  Nicaraguan  voting  

power,   in   the   current   IMF   system   can   prove   or   disprove   the   criticism   of   taxation   without  

representation  in  the  Fund?    

I.  Introduction:    

A.  Background  of  taxation  with  representation  in  the  domestic  system.  

Originally,  it  was  distinguished  in  courts  of  equity  that  sometimes  it  was  impractical  to  

have   present   all   persons   interested   in   a   case   and   then   the   strict   application   of   the   rule   could  

prevent   a   plaintiff   from   obtaining   justice   (Colombia   Law   Review,   n.d.).   When   not   all   of   the  

affected   are   present   an   exception   is   made,   in   convenience   for   the   parties   to   the   dispute  

whom  are  directly  involved  but  not  present  (Ibid,  n.d.).  The  rationale  being  that  the  court’s  

decision   will   be   binding   upon   them,   this   was   corrected   by   providing   representation   by  

someone  with  identical  interest  (Ibid,  n.d.).    

B.  Background  of  taxation  without  representation  in  the  IMF.  

  The  idea  of  the  Fund  as  a  system  based  on  virtual  representation  is  one  of  the  main  

criticisms  made  by  the  economist  J.    Stiglitz.  He  criticizes  that  although  the  Fund  was  created  

as   a   public   institution   based   on   the   idea   of   collecting   money   from   taxpayer’s,   such   is   not  

completely  carried  out  (CLG,  2009).  Since,  the  Fund  is  not  held  accountable  to  the  interests  

of   the   taxpayers   it   can   be   said   that   it   is   like   having   taxation   without   representation   (Ibid,  

2009).    

II.  IMF’s  Criticism  in  regard  to  voting  power  of  member  states  in  relation  to  
taxation  without  representation  

A.  Proportional  Voting  Structure    

  Control  of  the  IMF  is  carried  out  through  a  complicated  set  of  voting  structure  mostly,  

based   on   the   economic   influence   a   member   has   in   the   Fund   (CLG,   2009).   According   to   J.  

  16  
  

Stiglitz,  such  influence  is  driven  by  the  wealthier  and  industrialized  member‘s,  and  by  their  

commercial  and  financial  interests  (Ibid,  2009).  Stigitz  highlights  that  the  United  States  has  

virtual   veto   power   over   the   IMF   decisions,   since   it   has   the   majority   of   shares   in   the   Fund  

(Ibid,  2009).  The  Executive  Board  at  present  has  24  executive  directors  and  is  chaired  by  the  

MD  in  a  non-­‐voting  capacity  (Diaz,  2009).  The  Chair  formally  would  have  a  deciding  vote  in  

the   case   of   a   50-­‐50   split   vote,   but   with   weighted   voting   this   split   is   a   virtual   impossibility  

(Ibid,  2009).  In  practice,  since  1992  there  have  been  24  executive  directors:  5  appointed  and  

19  elected  (Ibid,  2009).  Five  directors  are  appointed  by  the  members  with  the  largest  quotas,  

and   hence   the   largest   shares   in   total   votes   (Ibid,   2009).   The   remaining   19   directors   are  

elected   by   the   members   who   are   not   entitled   to   appoint   a   director   that   is,   at   present,   the  

other  180  member  countries  (Ibid,  2009).  Regular  elections  are  held  every  two  years;  there  

are   provisions   for   interim   elections,   if   needed   and   for   by-­‐elections   if   an   elected   director  

leaves  during  the  course  of  his  term  (Ibid,  2009).    

  Executive  directors  are  involved  in  almost  every  aspect  of  the  Fund’s  activities,  both  

informally  in  interactions  with  management  and  staff,  and  formally  through  meetings  of  the  

Board   (Diaz,   2009).   They   also   play   an   important   role   in   informing   and   advising   their  

constituent   governments   on   all   aspects   of   the   IMF’s   work   (Ibid,   2009).   The   bulk   of   an  

executive   director’s   work   is   conducted   in   relation   to   formal   Board   meetings,   including  

preparation   and   follow   up   (Ibid,   2009).   In   2005,   the   Board   devoted   462   hours   to   formal  

Board   and   committee   meetings,   of   which   196   hours   (42   percent)   were   for   country   items,  

107   hours   (23   percent)   for   policy   items,   22   hours   (5   percent)   for   “multilateral   surveillance,”  

16   hours   (3.5   percent)   for   administrative   items,   and   40   hours   (9   percent)   for   Board  

committees.  The  proportions  have  remained  rather  steady  in  recent  years  (Ibid,  2009).    

  17  
  

B.  Allocation  of  Votes      

  The   main   criticism   regarding   the   allocation   of   votes   to   the   IMF   refer   to   Article   XII  

Section  2(a)  and  Section  3(b)  of  the  Articles  of  Agreement,  in  which  the  power  to  increase  

the  shares  of  votes  of  a  member  is  vested  on  the  Board  of  Governors  (Cooper,  2007).    The  

Board  is  the  Fund’s  highest  decision-­‐making  body,  and  it  consists  of  one  governor  and  one  

alternate  governor  for  every  member  state  (IMF,  2008).  The  Board  determines  the  quotas  of  

other   members   which   ought   to   be   paid   fully   in   form   of   a   deposit   to   the   Fund   (IMF,   1990).  

Moreover,   quotes   are   reviewed   by   the   board   every   five   years   and   the   power   to   change   them  

if  deemed  appropriated  in  accordance  to  the  Board  (Ibid,  1990).  All  members  of  the  Board  

must  vote  and  reach  a  majority  of  eighty-­‐five  percent  of  the  total  voting  power  (IMF,  1990).  

Once  again  we  need  to  examine  that  United  States  virtual  veto  power  is  necessary  in  order  to  

make  such  change,  since  it  has  the  majority  of  shares  on  the  Fund  (CLG,  2009).    This  can  be  

illustrated  with  China,  which  is  the  second-­‐largest  economy  yet,  it  has  only  3.7%  of  the  IMF's  

voting   shares   (Sarkar,   2009).   This   has   not   been   entirely   changed   to   represent   China’s   real  

role   in   the   economic   field;   since,   its   increased   on   shares   depends   on   the   approval   by   a  

majority   of   votes   of   the   Board   (Ibid,   2009).   Moreover,   one   of   the   main   obstacles   faced   by  

China  in  the  board  is  that  by  doing  so  other  members  would  have  to  give  part  of  theirs,  and  

these   would   come   from   those   who   hold   more   shares   meaning   the   developed   country  

members  (Ibid,  2009).    

i.  The  IMF  Response    

  In  2006,  the  IMF  system  was  modified  in  a  modest  way  by  authorizing  the  increase  in  

a   small   amount   of   shares   of   four   members,   one   of   them   China   (Sarkar,   2009).   Also,   this  

meant  the  increase  of  members  basic  votes  hence  the  revision  of  the  substantive  formulas  of  

quotas   (Cooper,   2007).   More   recently,   the   G20   a   group   that   consist   of   the   following  

countries:    Argentina,  France,  Japan,  South  Africa,  Australia,  Germany,  Korea,  Turkey,  Brazil,  

  18  
  

Canada,   China,   India,   Mexico,   United   Kingdom,   Indonesia,   Russia,   United   States,   Italy   and  

Saudi   Arabia;     recognized   that   there   is   a   need   of   reforming   the   IMF   allocation   of   shares  

(Schiffers,   2009).   And   compromised   on   revising   the   reduction   by   5%   of   developed   countries  

shares   by   the   year   2011,   yet,   the   way   that   this   was   ought   to   be   conduct   was   not   specified  

(Ibid,  2009).    

  ii.  Counter  argument:  

  As  we  will  see  in  the  section  IV,  part  B,  the  method  proposed  to  correct  this  problem  

is  re-­‐allocating  the  shares  of  the  Fund,  which  supposedly  lead  to  a  more  fair  system.  Hence,  

the  fulfillment  of  the  concept  of  taxation  with  representation  being  represented  by  Stiglitz;  

this  has  being  Criticized  by  other  members  of  the  Fund.  For  example,  an  EC  representative  

Reinfeldt   expressed   the   reluctance   for   this   measure,   because   developed   countries   are   the  

ones  that  contribute  the  most  to  the  Funds  finances.  Since  doing  so  would  mean,  to  give  up  

the  EC’s  power  to  other  countries  that  contribute  less  (Ibid,  2009).  

III.    Nicaragua’s  application  to  the  Criticism    

A.  Proportional  Voting  Structure    

  When  it  comes  to  applying  weighted  or  proportional  voting  in  Nicaragua;  it  is  entitled  

to  the  basic  vote  as  a  member.  Moreover,  according,  to  Article  XII,  section  5  “each  member  

shall   have   two   hundred   fifty   votes   plus   one   additional   vote   for   each   part   of   its   quota,  

equivalent  to  one  hundred  thousand  special  drawing  rights”  (IMF,  1990).    In  addition,  basic  

votes  were  created  with  the  purpose  of  preventing  situations  in  which  some  members  with  

small   quotas   would   not   have   any   sense   of   participation   in   the   operations   of   the   Fund  

(Rapkin,  David  &  Jonathan  Strand,  2006).    

In   the   application   in   Nicaragua’s   quality   of   shareholder   representation   is   not  

completely   enhanced   meaning   that   currently,   only   eight   chairs   (a   third   of   the   total)  

represent  only  one  country  each,  leaving  the  other  sixteen  to  each  represent  an  average  of  

  19  
  

more   than   ten   countries   (Diaz,   2009).   Currently,   Nicaragua   among   other   countries   such   as  

Guatemala,  Honduras,  Mexico,  Venezuela,  Spain,  El  Salvador,  and  Costa  Rica  have  composed  

a   bloc   to   allot   their   amount   of   shares   in   order   to   have   a   greater   amount   of   voting   procedure,  

in   which   Spain   is   the   country   representing   them   and   delivering   the   message   to   the   IMF  

(Diaz,  2009).  The  representative  of  the  Bloc  is  Ramón  Guzmán  Zapater  from  Spain,  and  the  

bloc  holds  a  total  number  of  shares  which  constitutes  4.45  of  the  total  votes  in  the  fund  (IMF,  

2009).  Finally,  countries  form  blocs  to  allot  their  amount  of  shares  in  order  to  have  a  greater  

saying  in  the  voting  procedure;  yet,  the  formation  of  such  groups  raises  the  question,  such  as  

in  the  case  of  Nicaragua,  as  to  what  extent  can  a  group  be  a  channel  to  address  Nicaraguan  

problems.  

B.  Allocation  of  Votes  

  The   role     that   Nicaragua   can   play   in   the   allocation   of   shares   in   the   Fund,   can   be  

accomplish  through  its  governor  in  the  Board,  which  is  usually  the  minister  of  finance  or  the  

governor  of  the  Central  Bank  (IMF,  2009).  As  discussed  in  Section  II,  part  B  if  a  change  ought  

to  happen  in  the  allocation  of  shares,  what  would  Nicaragua’s  voting  weight  or  voice  be  in  

such   matter;   this   can   be   calculated   by   the   numbers   of   shares   in   the   fund.   In   December   09,  

2009  it  was  noted  that  Nicaragua  had  130  Special  Drawing  Rights  and  0.06  of  the  total  voting  

power   in   the   Board   of   Governors   (Ibid,   2009).   In   contrast,   to   the   United   States,   which   has  

37,149.3  Special  Drawing  Right  and  17.09  of  the  total  power  of  the  Board  (Ibid,  2009).  With  

the   purpose   of   examining   how   many   quotas   would   be   needed   to   be   transfer   from   those  

members  that  hold  more  shares  to  those  who  only  have  virtually  no  shares,  it  is  noticed  that  

by   joining   110   countries   with   the   lower   quotas   this   sums   a   total   of   18   percent   of   the   total  

voting  share  in  the  Fund  (Rapkin,  David  &  Jonathan  Strand,  2006).    

  20  
  

IV.  Analysis  

  A.  Proportional  Voting  Structure    

The   doctrine   of   virtual   representation   is   found   on   domestic   systems   and   it   used   in   cases  

when  “a  person  is  represented  by  a  party  who  is  .  .  .  [t]he  trustee  of  an  estate  or  interest  of  

which   the   person   is   a   beneficiary”   (Bank   One   Texas   v   USA,   1998).     Taxation   with  

representation  in  contrast  to  virtual  representation  is  a  representation  by  someone  with  an  

identical   interest.   It   can   be   argue   that   Nicaragua’s   conditions   is   not   the   same   as   all   of   the  

members   of   the   bloc   to   which   it   is   a   member,   hence   which   represents   it   in   the   Executive  

Board.   Thus,   this   reduces   the   quality   of   participation   by   most   of   the   Fund’s   members,  

especially   by   some   of   the   poorest   countries   that   have   very   intensive   policy   relationships  

with  the  Fund  (Diaz,  2009).  Which  in  essence  is  the  problem  concerning  the  application  in  

Nicaragua.   Therefore,   this   has   lead   voting   issues   concerning   Nicaragua   as   being   uncertain  

and  unbalanced,  because  it  is  not  with  certainty  the  exact  decisions  made  by  Nicaragua  when  

being  represented  by  another  country  such  as  Spain.  This  also  has  an  effect  on  the  decision  

making,   since   this   can   undermine   the   legitimacy   and   relevance   of   the   Fund   and   its   role   of  

promoting  global  growth  and  stability  (Cooper,  2007).    

  B.  Allocation  of  Votes    

  In  the  case  of  determining  if  Nicaragua  has  a  voice  in  the  Board  of  Governors,  it  can  

argued   that   it   is   among   the   smallest   members   whom   feel   that   their   miniscule   quotas    

preclude  an  effective  voice  in  the  Fund  (Rapkin,  David  &  Jonathan  Strand,  2006).  The  impact  

of  this  being  that  Nicaragua,  having  such  a  small  percentage  of  the  total  share  in  the  Board  

has  small  influence.  Therefore,  the  effect  on  the  decision  making  power  concerning  the  re-­‐

allocation  of  votes  leaves  Nicaragua  with  a  small  relevance  in  the  institution  and  its  role  of  

promoting  global  growth  and  stability  (Cooper,  2007).  In  addition,  the  allocation  of  quotas  is  

and  indicator  of  influence  a  member  may  have  in  the  decision  making  of  the  fund;  in  some  

cases  can  be  an  obstacle  for  changing  the  world  economy  (Ibid,  2007).  An  example  of  this  is  

  21  
  

how  the  allocation  of  the  shares  in  China’s  case  can  be  a  cumbersome  process.  Finally,  this  

proves   that   Nicaragua   has   a   clear   disadvantage   if   compared   to   other   members   with   larger  

shares.  

C.  Recommendations    
  In   regard   to   the   Executive   Board   power   there   has   been   a   unilateral   proposal   from  

part   of   US   which   consisted   in   “reducing   the   number   of   executive   seats   in   the   IMF   from   24   to  

12   as   a   means   to   increase   proportionately   the   votes   of   developing   countries   in   the  

deliberations   of   the   IMF”   (Schiffers,   2009).   In   2007,   a   proposal   regarding   the   shares  

allocations   have   been   made   proposing   a   revision   of   the   funds   system   of   the   allocation   of  

shares   it   consisted   of   new   “formula”   (Cooper,   2007).   In   simple   words,   the   new   formula  

places  traditional  industrial  countries  in  the  position  of  targeting  a  limitation  of  their  quota  

to  be  a  share  of  60  percent  of  their  GDP;  With  the  purpose  of  facilitating  the  redistribution  of  

quota  shares  toward  the  non-­‐industrial  countries  (Ibid,  2007).    

  As   a   conclusion,   after   examining   the   formula   relating   weighted   voting   and   how   it  

takes  place  or  the  possible  disadvantages  in  the  process  faced  by  developing  countries  such  

as   in   the   case   of   Nicaragua.   We   can   with   certainty   state   that   the   criticism   being   held  

concerning   weighted   voting   is   in   fact   accurate   and   holds   partial   aspects   that   make   the  

criticism   true.   Since,   it   is   hard   to   define   what   really   constitutes   a   meaningful,   equitable,  

effective  participation  and  the  role  played  in  the  Fund  by  those  countries  with  virtually  no  

shares  (Rapkin,  David  &  Jonathan  Strand,  2006).    

IV.  CONCLUSION  

IMF   conditionality   spreads   over   a   broad   range   of   fields.   It   includes   a   strict   control  

over   fiscal   performance   aiming   towards   contractionary   policies:   setting   inflexible   goals   in  

relation   to   government   spending,   public   deficit,   the   amount   of   resources   the   government  

  22  
  

should   transfer   to   the   central   bank,   the   accumulation   of   international   reserves   (Acevedo  

Vogl,   2006).   In   addition,   it   sets   reforms   for   the   legal   framework   that   regulates   local  

governments  and  determines  their  scope,  and  the  allocation  of  their  assigned  budget,  as  well  

as  a  comprehensive  review  of  other  legislation  such  as  the  Tax  Code,  Energy  Stability  Law,  

Social   Security,   Fiscal   Responsibility,   Budgetary   Regime,   etc.   (Acevedo   Vogl,   2006).     In   the  

case   of   Nicaragua,   public   debt   service   represents   –   besides   the   insufficient   and   regressive  

character  of  the  tax  burden  –  the  main  obstacle  for  the  allocation  of  resources  required  for  

investment   in   human   development   and   capital   (Acevedo   Vogl,   2006).   The   IMF   should   just  

limit   itself   to   ensure   the   prevention   of   unmanageable   fiscal   imbalances   and   in   this   way  

permitting   the   country   to   decide   the   policies   looking   towards   development   and   the  

reduction  of  inequalities  through  open,  democratic  and  participatory  processes.  

REFERENCE  LIST  
 
Acevedo,  A.  (2006,  July  17).  IMF  conditionalities  in  Nicaragua.  Retrieved  from    
http://ifis.choike.org/informes/385.html  
 
Business  News  America,  .  (1998,  January  14).  Nicaragua,  imf  ratify  privatization  program.    
Retrieved  from  
http://www.bnamericas.com/news/privatization/Nicaragua,_IMF_Ratify_Privatizatio
n_Program  
 
Buira  Ariel  (2003);  An  Analysis  of  IMF  Conditionality.  Retrieved  November  30,  2009    
from:  http://www.unctad.org/en/docs/gdsmdpbg2420033.pdf  
 
Carrion,  G.  (2003).  Privatizaciones:  una  polémica  que  no  tiene  fin.  El  Observador  Economico,    
(140),  Retrieved  from  
http://www.elobservadoreconomico.com/archivo_anterior/140/actualidad.htm  
 
Cliffnotes,  .  (2009).  Fiscal  policy.  Retrieved  from    
http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic/Fiscal-­‐
Policy.topicArticleId-­‐9789,articleId-­‐9749.html  
 
Davis  et  Al,  J.  (2005).  Fiscal  and  macroeconomic  impact  of  privatization.  Retrieved  from    
http://www.imf.org/external/pubs/nft/op/194/index.htm  
 
Defranco,  M.  A.  (2009,  December).  PhD  Economics.  (E.  Barrios,  Interviewer,  &  E.  Barrios,    

  23  
  

Translator)  
 
Dreher,  .  (2005).  Does  the  Imf  influence  fiscal  and  monetary  policy?.  Retrieved  from    
http://www.axel-­‐dreher.de/imffiscal.pdf  
 
Garret,  G.  (2003,  November).  Privatization  and  the  imf:  imf's  good  housekeeping  seal  of    
approval  wins  favor  with  investors.  Retrieved  from  
http://www.international.ucla.edu/article.asp?parentid=5135  
 
Global  Analyst  Online,  Initials.  (2009,  October  19).  Finance:  imf  loan  policies  worsening    
crisis,  ngos  say.  Retrieved  from  
http://www.globalnewsblog.com/wp/2009/10/06/finance-­‐imf-­‐loan-­‐policies-­‐
worsening-­‐crisis-­‐ngos-­‐say/  
 
IMF  (2003,  April).  Does  IMF  fiscal  policy  advice  end  up  hurting  the  poor?.  Retrieved  from    
http://www.imf.org/External/NP/EXR/ECForums/2003/042903.htm    
 
IMF  (n.d.)  International  Monetary  Fun  Home  page.  Retrieved  November  28,  2009    
from:  http://www.imf.org/external/about/whatwedo.htm  
 
Jubilee,  .  (2008).  Are  Imf  and  world  bank  economic  policy  conditions  undermining  the    
impact  of  debt  cancellation?.  Retrieved  from  
http://www.jubileeusa.org/fileadmin/user_upload/Resources/Policy_Archive/208br
iefnoteconditionality.pdf  
 
Meltzer  (2000);  Meltzer  Report.  Retrieved  November  30,  2009  from:    
http://www.adb.org/Documents/Slideshows/Meltzer_Report/Meltzer_Report.df  
 
Relea,  F.  (2007).  Los  apagones  sitúan  a  fenosa  bajo  el  fuego  de  las  críticas  en  nicaragua.  El    
Pais,  Retrieved  
fromhttp://www.elpais.com/articulo/economia/apagones/situan/Fenosa/fuego/cri
ticas  Nicaragua/elpepueco/20071126elpepieco_4/Tes  
 
Riley,    (2006).  Fiscal  policy  effects.  Retrieved  from  http://tutor2u.net/economics/revision-­‐
notes/a2-­‐macro-­‐fiscal-­‐policy-­‐effects.html  
 
Stiglitz,  Joseph  E.  (2002)  Globalization  and  Its  Discontents.  New  York:  Norton.  
 
US  General  Accounting  Office,  Initials.  (2009).  What  is  Privatization?.  Retrieved  from    
http://www.privatization.org/database/whatisprivatization.html  
 
Urrea,  D.  (2008).  Alternativas  a  la  privatización  del  agua  en  América  Latina:  aportes  para    
el  caso  colombiano..  Retrieved  from  
http://www.censat.org/noticias/2008/9/22/Alternativas-­‐a-­‐la-­‐privatizacion-­‐del-­‐
agua-­‐en-­‐America-­‐Latina-­‐Aportes-­‐para-­‐el-­‐caso-­‐colombiano/  
 
Water  Watch,.  (2007).  Nicaragua  –  imf  imposes  privatization  policies.  Retrieved  from    
http://www.foodandwaterwatch.org/world/latin-­‐america/water-­‐
privatization/nicaragua/nicaragua-­‐2013-­‐imf-­‐imposes-­‐privatization-­‐policies  
 
(2007).  Fenosa  firma  acuerdos  de  entendimiento.  El  Nuevo  Diario,  9687.  Retrieved  from    
  24  
  

http://impreso.elnuevodiario.com.ni/2007/08/02/nacionales/55307  
 
Weil,  David.  (n.d.).  Fiscal  policy.  Retrieved  from    
http://www.econlib.org/library/Enc/FiscalPolicy.html#lfHendersonCEE2-­‐
060_figure_020  

  25