{"id":24390,"date":"2023-05-24T10:16:27","date_gmt":"2023-05-24T14:16:27","guid":{"rendered":"https:\/\/www.bu.edu\/gdp\/?p=24390"},"modified":"2023-05-24T15:04:06","modified_gmt":"2023-05-24T19:04:06","slug":"understanding-amros-nested-outgrowth-from-the-imf","status":"publish","type":"post","link":"https:\/\/www.bu.edu\/gdp\/2023\/05\/24\/understanding-amros-nested-outgrowth-from-the-imf\/","title":{"rendered":"Understanding AMRO\u2019s Nested Outgrowth from the IMF"},"content":{"rendered":"
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Singapore. Photo by Lily Banse via Unsplash.<\/figcaption><\/figure>\n

By Yaechan Lee<\/a><\/p>\n

The International Monetary Fund (IMF) continues to be the focal institution in the Global Financial Safety Net (GFSN), which refers<\/a> to a set of institutions and mechanisms that provide insurance against crises and financing to mitigate their impact. Yet, the IMF\u2019s stringent conditionalities that were often perceived<\/a> to ignore country-specificities, and the increasing demand<\/a> for more crisis-lending, have led to the establishment of numerous bilateral and regional-level financial arrangements. One of the most prominent examples of such regional arrangements is the Chiang Mai Initiative Multilateralism (CMIM) and its surveillance unit, the ASEAN+3 Macroeconomic Research Office (AMRO), established to manage the CMIM\u2019s lending operations.<\/p>\n

With a total lending capacity of $240 billion, the CMIM was established to provide additional crisis-lending support to its member states which consisted of economies in the Asia-Pacific, while AMRO\u2019s aim was to conduct independent surveillance and manage loans so that it can design loan conditionalities that better match country-specificities. While the CMIM\u2019s potential contribution to the GFSN is clear, AMRO\u2019s contributions have remained rather vague. This is partially because AMRO\u2019s contributions are qualitative, given that AMRO\u2019s primary function is surveillance, compared to the quantitative contributions of the CMIM, which refers to the reserve pool itself.<\/p>\n

A new working paper<\/em><\/strong><\/a> that I coauthored with William N. Kring<\/a> and William W. Grimes<\/a> clarifies AMRO\u2019s contribution to the GFSN by comparing its surveillance reports and policy recommendations to those of the IMF to identify AMRO\u2019s added value. For this, we conduct a detailed qualitative analysis of the country\/regional level surveillance reports published between 2016-2020 by AMRO and the IMF, assessing a combination of 82 Regional Economic Outlooks (REOs) and bilateral country surveillance reports.<\/p>\n

We compared the surveillance outputs of the IMF and AMRO across three dimensions: referencing, policy recommendations and analytical approach. The three parameters sequentially capture the basic processes involved in conducting policy research: data collection, establishment of analytical framework and resulting policy recommendations. First, through the referencing parameter, we assess what data sources the two institutions use and refer to. Through this, we gauge the inter-linkage between the two institutions by tracking how often their reports cross-reference.<\/p>\n

A mutually equal level of cross-referencing would show that AMRO is, indeed, beginning to grow out<\/a><\/span> of the IMF\u2019s \u2018nest.\u2019 On the other hand, a unilateral referencing from either institution may show an institution\u2019s dependence. Second, the analytical approach parameter captures how the two institutions analyze and interpret their acquired data. Through this we identify differences in the two institutions\u2019 methodological approach and perspective. Lastly, the policy recommendations parameter assesses the two institutions\u2019 approaches to policy in three major discussions in the reports: trade liberalization, macroprudential policy and usage of fiscal capacity. Through this, we capture the output of the two institutions\u2019 data collection and analysis.<\/p>\n

From this analysis we can draw the following conclusions. First, in terms of referencing, our analysis finds that AMRO is still heavily reliant on the IMF for data and analytic insights. Every surveillance report observed made extensive references to IMF data and reports and often directly used the analytic frameworks employed by IMF surveillance reports. The data from the IMF is compilation of data collected from government authorities, which AMRO uses through the IMF. AMRO does collect its own data through consultations but at a limited level.<\/p>\n

Nevertheless, the datasets and insights employed by AMRO surveillance reports are not simply echoes of the IMF. In searching for ways that AMRO can complement the IMF, AMRO has been directly referencing the views of the member states\u2019 policy perspectives, serving as a platform for candid policy discussions with member state policymakers. The IMF also leaves space for government authorities to voice their responses to the recommendations made by the IMF, but AMRO provides a larger space for authorities to not only simply \u2018respond\u2019, but also showcase new policy changes that they are making beyond the recommendations.<\/p>\n

Second, we then find that AMRO\u2019s policy recommendations are closely aligned with the IMF across three main policy areas analyzed: trade, capital flow and fiscal policy. How they justify their recommendations, however, is different. AMRO makes extensive use of country-specific case studies to provide evidence for policy recommendations, but the IMF mostly uses a broader quantitative approach to accomplish the same task.<\/p>\n

Third, the IMF and AMRO differ in terms of their analytical approach with regards to their methodology and perspective in assessing policy issues.<\/p>\n

AMRO\u2019s methodological approach involves a more case-based, historically oriented approach while the IMF takes a more topic-based, current issue-focused approach. In trade, for instance, AMRO\u2019s REO in 2019 conducts a detailed case study on the US-China trade dispute to specifically assess the spillovers of the dispute on the regional economy. On the other hand, the IMF generalizes it as an increase in protectionism and observes macroeconomic indicators to quantitatively gauge the impact of trade protectionism. This does not imply that the institutions solely employ these respective approaches but rather that there is a higher frequency of such approaches in the reports observed.<\/p>\n

Our findings suggest that AMRO has been able to achieve a \u2018nested outgrowth\u2019 from the IMF, since it remains nested within the IMF in terms of its policy directions and data reference but also demonstrates important differences in how it approaches and interprets key policy issues. For instance, by directly providing space for regional policymakers to not only respond to the recommendations made in the surveillance reports but also use the reports as a platform to showcase their new policy innovations, AMRO serves as a platform for a candid discussion on new policy issues and directions. AMRO\u2019s case-based and inside-out approach presents an in-depth insider\u2019s take on key policy issues in the region, complementing the topical and outside-in approach of IMF surveillance. While AMRO functionally remains nested in the IMF, it allows for more candid policy discussions and focuses on country-specific examples to justify the same policy recommendations.<\/p>\nRead the Working Paper<\/a>\n

*<\/p>\n

Never miss an update: <\/em>Subscribe to the Global Economic Governance Newsletter<\/em><\/a><\/span>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By Yaechan Lee The International Monetary Fund (IMF) continues to be the focal institution in the Global Financial Safety Net (GFSN), which refers to a set of institutions and mechanisms that provide insurance against crises and financing to mitigate their impact. Yet, the IMF\u2019s stringent conditionalities that were often perceived to ignore country-specificities, and the […]<\/p>\n","protected":false},"author":19363,"featured_media":24394,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[398,55,156,77,1074,58],"tags":[3318,1729,770,3662,3660,1998,1459,1187,1186,1246,713,506,438,236,459,772,178,1271,3661,610,681,1693,1929,954],"_links":{"self":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/24390"}],"collection":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/users\/19363"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/comments?post=24390"}],"version-history":[{"count":8,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/24390\/revisions"}],"predecessor-version":[{"id":24437,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/posts\/24390\/revisions\/24437"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media\/24394"}],"wp:attachment":[{"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/media?parent=24390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/categories?post=24390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bu.edu\/gdp\/wp-json\/wp\/v2\/tags?post=24390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}