The Cyprus Bailout and European Banking Stability

Cypriot protestors demonstrate against the EU’s proposed savings tax.

The Cypriot parliament on Tuesday rejected a proposed bailout package from the European Union that would have imposed a surcharge on bank deposits. The tax was resoundly defeated, with 36 members of parliament opposing the measure and 19 abstaining; no one voted in support. Meanwhile, thousands of protestors had taken to the streets to voice their opposition to the measure.

German Finance Minister Wolfgang Schauble noted that he “regretted” the Cypriot parliament’s decision, asserting that “There is a danger they won’t be able to open the banks again at all.”

The measure would have imposed a 6.75 percent levy on all deposits of less than 100,000 euros, and a 9.9 percent surcharge on deposits of more than 100,000 euros. In a last-ditch effort to save the measure, the government of Cyprus announced ahead of the vote that accounts of less than 20,000 euros would be exempted from the tax.

Cyprus, which like Ireland and Iceland had attempted to position itself as an international banking center, had an exceptionally large number of foreign depositors. It was estimated that approximately 40 percent of all deposits on the small island were held by foreigners, mostly Russians. The European Union’s measure angered the Russian government, which announced that it would need to reconsider the terms of a 2.5 billion euro loan it had made to Cyprus in 2011. Cyprus’ Finance Minister, Michalis Sarris, was in Moscow on Tuesday, hoping to extend repayment terms and lower the interest rate on the original loan.

International observers widely condemned the European Union’s proposed bailout package, the terms of which were released on Saturday. Economist Paul Krugman argued that,

You can sort of see why they’re doing this: Cyprus is a money haven, especially for the assets of Russian beeznessmen; this means that it has a hugely oversized banking sector (think Iceland) and that a haircut-free bailout would be seen as a bailout, not just of Cyprus, but of Russians of, let’s say, uncertain probity and moral character…The big problem, however, is that it’s not just large foreign deposits that are taking a haircut; the haircut on small domestic deposits is a bit smaller, but still substantial. It’s as if the Europeans are holding up a neon sign, written in Greek and Italian, saying “time to stage a run on your banks!”

The Cypriot case is particularly interesting. According to an IMF report, the country was doing well before the 2008 global economic crisis, experiencing “a long period of high growth, low unemployment, and sound public finances.” But the global financial crisis hit Cyprus particularly hard, as the country was exceptionally dependent on foreign depositors. By 2011, concerns were emerging. Cypriot banks had made loans to Greek barrowers totaling more than 160 percent of the Cypriot GDP, and those ties to the Greek economy were beginning to drag down Cyprus.

What’s interesting is the moral hazard that the imposition of the new levy poses for other banks in the European Union. As Krugman notes, Europeans watching from other troubled economies (think Spain, Portugal, and Italy) the bailout requirements in Cyprus may be an incentive for them to relocate their assets before their country is forced to undertake similar reforms.

What do you think? Are the conditions imposed by the European Union on Cyprus as a prerequisite for receiving a rescue package reasonable? Or do they threaten to undermine economic stability in other troubled European economies? Leave a comment below and let us know what you think.

Revisiting British Membership in the European Union

British Prime Minister David Cameron delivered his long awaited speech on the future of British membership in the European Union today. The full transcript of his speech is available on the BBC website.  The 38 minute speech is also available below.

In the speech, Cameron promises a referendum on British membership in the European Union if his Conservative Party wins reelection in 2015. The ballot, according to Cameron, will permit British voters the opportunity to choose between renegotiating British membership or complete British withdrawal.

Reaction to the speech was strong and quick. Germany warned that the United Kingdom could not “cherry pick” its membership criteria, while France asserted that an “a la carte” EU membership was not on the table. The United States has also weighed in on the debate, with President Obama last week asserting that, “he United States values a strong UK in a strong European Union.”  Obama’s preferences were reiterated by US Assistant Secretary for European Affairs, Philip Gordon, who today stated  “We have a growing relationship with the EU as an institution, which has an increasing voice in the world, and we want to see a strong British voice in that EU… That is in America’s interests. We welcome an outward-looking EU with Britain in it.”

The move, as we discussed last week,  appears to be a function more of domestic British politics than broader multilateral interests. Flanked on one side by nationalist parties in Scotland, Wales, and Northern Ireland demanding greater devolution of political authority and on the other by British nationalists expressing a strongly Eurosceptic worldview, Cameron’s maneuver appears to have more to do with securing reelection of his party than developing a coherent policy towards Europe. Nevertheless, Cameron’s policy could have interesting implications for both British and European politics…even if we have to wait until 2015 to figure out exactly what those implications are.

The Future of Britain and the European Union

Britain’s Prime Minister David Cameron

The hostage crisis in Algeria forced British Prime Minister David Cameron to delay a long-awaited speech outlining his government’s view of the future of British involvement in the European Union. Nevertheless, in a truncated address over the weekend, Cameron asserted that the European Union is undergoing a process of “fundamental change,” and that a central component of that change must be addressing the “gap between the EU and tis citizens which has grown dramatically in recent years and which represents a lack of democratic accountability and consent that is—yes—felt particularly acutely in Britain. If we can’t address these challenges,” Cameron stated, “the danger is that European will fail and the British people will drift toward the exit.”

Cameron stopped short of calling for a referendum on British membership in the European Union, as some in his party had been calling for. Nevertheless, the thought that a sitting British Prime Minister would contemplate leaving the E.U. has caused concern on both sides of the Atlantic. According to the British Mail Online, President Barack Obama called Prime Minister Cameron, urging him to express his commitment to British membership in the EU and noting that the European Union has spread “peace, prosperity and security” around the world.

The idea that the European Union suffers a democratic deficit is longstanding. A democratic deficit occurs when organizations (like the United Nations or the European Union) fall short of living up to the principles of democracy and representation to which they are ostensibly committed. In the case of international organizations like the EU, the relative weakness of popularly-elected institutions (the European Parliament) vis-à-vis the power of the major players (the European Commission and the European Council) often lead to assertions of a democratic deficit. Yet the structure of the European Union privileges the position of Member States relative to the position of European citizens. The most powerful institutions within the European Union, in other words, are beholden to the governments of Europe rather than directly to its people.

So why all the fuss?

Cameron is likely responding more to domestic British politics than to changing dynamics or concerns at the European level. Certainly the ongoing economic crisis in Europe is a reason for concern. The threat of a Eurozone meltdown (led by Greece, but fueled also by Spain, Portugal, and perhaps even France) give reason for pause. But Britain is not a member of the Eurozone and consequently maintains considerable economic and fiscal policy autonomy.

Rather, the growing influence of euroscepticism on the domestic British political scene likely plays a greater role. More specifically three trends are driving policy reform. First, the traditional pro-free trade elements of the Conservative party have increasingly been challenged by more Eurosceptic elements, including the Cornerstone Group, which claims some fifty conservative MPs as members, including several members of the cabinet. Second, the rise of several small parties, including the UK Independence Party and the British National Party, have exacerbated these concerns. Finally, a broad level of euroscepticism appears to be gaining support among the British electorate. According to recent public opinion polling, half the British population now supports British withdrawal from the European Union.

Importantly, the United Kingdom is not alone in this respect. Eurobarometer polling data show that popular support for EUY membership was waning across many EU member states, most notably in Latvia, Hungary, and the UK, in which all are home to a majority population opposing EU membership. Every EU member state now has at least one political party with an anti-EU platform.

All of this raises questions about the future of the European Union. What do you think? Does has European integration hit is high water mark? Are we now witnessing the beginning of the end of the EU? Or does all this talk of withdrawal merely represent politically maneuvering and bluster? Take the poll or leave a comment below and let us know what you think.

The Nobel Peace Prize

Jose Manuel Barroso and Herman Van Rompuy respond to the announcement of the award.

Most observers were surprised when the Nobel Committee awarded the 2012 Nobel Peace Prize to the European Union on Friday. Newspapers from across the continent described the decision as “surprising,” “strange,” “timely,” and even “shocking.” Few anticipated the award.

In an editorial in Belgium’s La Libre Belgique, Oliver le Bussy argued that “the Nobel committee wanted to remind people that the European project… has had a civilising effect, making a large contribution to turning ancient enemies into partners and spreading democracy and human rights.” Spain’s El Pais echoed this sentiment, arguing that the prize provided “moral support and encouragement to overcome individual nations’ reservations, which impede decisive progress” towards greater integration, including “naturally, political union.”

Some, however, were more skeptical. The British papers provided a wide range of criticism. But perhaps the most powerful critique was Thomas Kirchner’s piece in the Sueddeutsche Zeitung, in which he describes the EU as a “ quarreling bunch of more or less bankrupt states” and says the Nobel committee “must be careful if it wants its decisions to be taken seriously for much longer.”

And the British newspaper The Guardian offered perhaps the most humorous take.

Was the Nobel Committee off course in its decision? The answer depends on your time frame of analysis. Certainly the European Union has been plagued by fiscal crises over the past several years. Its inability to develop a coherent response to the Greek crisis (let alone to respond in a meaningful way to Portugal and Spain) raise real concerns about the future of the organization.

But the history of the European Union deserve recognition. As the European Union positions itself increasingly as a single market with a single currency, it’s easy to forget the roots of the organization in the aftermath of World War II. At that time, the primary focus of European integration was simple: prevent war between Germany and France. Guided by the principles of institutional liberalism, the founders of the European Union sought to expand political, social, and above all economic cooperation between Germany and France in an effort to prevent future wars.

And from this perspective, the Nobel Peace Prize makes much more sense. The thought of war between Germany and France—really between any two members of the European Union—appears laughable today. So while the European Union struggles with fiscal recovery and economic reconstruction, it is important to remember roots as an institution of international political stability.

Still, there were many others who might have won the award. CNN’s Frida Ghitis described the decision as a “missed opportunity” and contended the award could have been more productive in achieving its goal of promoting international peace had it been awarded to someone else. She singles out Malalal Yousafzani, the 14 year old Pakistani girl shot by Talibani militants for advocating education for girls, as particularly worthy. Ahead of the decision, the bookmaking site NicerOdds was giving best odds to Gene Sharp, a political theorist of nonviolence, and Sima Samar, chair of the Afghan Independent Human Rights Commission and the United Nations Special Rapporteur on Human Rights in Sudan.

What do you think? Did the Nobel Committee did it make the right decision in recognizing the organization’s history? Or did it miss the mark in awarding the 2012 Nobel Peace Prize to the European Union? And who do you think should have won the award? Let us know what you think by leaving a comment or answering the poll question below.

The Greek Option: Monetary and Fiscal Policy

German Chancellor Angela Merkel meets with Greek Prime Minister Antonis Samaras in August.

The Greek government met with the European Union, the European Central Bank, and the International Monetary Fund over the weekend. The meeting between Greece and the troika was intended to clarify requirements to qualify for the next round of bailout funds. Greece has already committed to more than 11.5bn euros in spending cuts and another 2bn euros in tax revenue. But Prime Minister Antonis Samaras concedes Greece is unlikely to meet expectations imposed by international lenders.

The challenge for Greece is that the plan is highly unpopular, and the country has been rocked by several rounds of widespread protest. The Greek economy has collapsed, contracting by 20 percent over the last year alone. Yet absent external relief from the IMF and EU, Greece faces the prospect of bankruptcy and potential expulsion from the eurozone. And outside of Greece, observers in Spain, Portugal, and other troubled eurozone economies are watching developments closely.

The current conundrum in Greece illustrates some of the economic challenges of the common European currency. In normal times, a common currency presents clear benefits. It facilitates closer and more efficient management of the economy, reduces transaction barriers and cost of trade between countries sharing the currency, and can help to reduce economic uncertainty.   Indeed, when the euro was adopted as the exclusive currency in the eurozone in 2002, it was highly popular, and many eurozone members enthusiastically embraced the new currency.

At the same time, though, the common currency presents a key challenge, particularly during economic downturns. Traditionally, governments have two economic toolkits available to them. Fiscal policy, advocated most famously by John Maynard Keynes, focuses on the use of government revenue (taxation) and expenditures (spending) to influence economic activity in the country. Keynes argued that in good times, governments should run a budget surplus so that during poor economic times, it would have ample revenue to spend, including running a deficit, and prevent a deep recession or depression.

Monetary policy, on the other hand, focuses on manipulation of the money supply, often through interest rates, to promote economic growth and stability. Monetary policy, which was most famously promoted by Milton Friedman, provides that governments should lower interest rates to promote economic growth, but should engage in contractionary policies (including raising interest rates) to prevent the economy from overheating. Above all, monetary policy focuses on maintaining a stable money supply and money value, and keeping inflation as close to zero as possible.

In practice, governments regularly use a combination of both monetary and fiscal policy to manage economic growth and stability. However, the eurozone encompasses a wide range of countries and economies, ranging from the economic powerhouse of Germany to the crisis-ridden economies of Greece, Spain, and Portugal, to a large number of smaller economies somewhere in the middle. The question of how to balance competing demands across all eurozone economies presents a challenge. The monetary policies that would maintain economic stability and growth in Germany are different from the monetary policies that might be used to prevent economic collapse in Greece. Consequently, the European Central Bank faces the challenge of finding a fine line to walk between the two.

The other challenge, of course, is that because Greece is a member of the eurozone, it effectively has cut off one of the two primary economic policies governments might use to address the economic crisis. While the Greek government can continue to use fiscal policy, its ability to use monetary policy to address the crisis is sharply limited by the fact that the Greek government does not control the Greek currency.

Not that leaving the eurozone would make things better for Greece. For now, it appears the Greek government is committed to remaining in the seventeen nation eurozone, and the German government is committed to helping Greece remain there. But if Greece is unable to reach agreement with the troika, exiting the eurozone, either on its own terms or aftering being forced out by the other members, may be Greece’s only option.

What do you think? Do the benefits of eurozone membership outweigh the costs for the Greek government? Should Greece make the sharp spending cuts demanded by the international community to remain part of the eurozone? How would Greece leaving the eurozone affect future economic developments in other troubled European economies, like Spain and Portugal? Let us know what you think by leaving a comment or answering the poll question below.

Levels of Analysis and the Euro Crisis

The decisions of German Chancellor Angela Merkel have emerged as a key individual-level driver of outcomes in the eurozone financial crisis.

The financial crisis unfolding in Europe provides a stark illustration of the complex interactions between system-level, state-level, and individual-level variables in contemporary world politics. Political scientists employ these three (and sometimes more) levels of analysis as an analytical device to categorize the causal “drivers” that produce outcomes in international relations.  This framework might shed light on the current Eurozone crisis as follows:

(1) The system level of analysis includes attributes of the international system and supranational actors.  The power imbalance between the wealthier and more financially secure European states, such as Germany, and those needing bailouts, such as Portugal and Greece, can be viewed as a system-level factor placing pressure on weaker states to abide by the stronger countries’ demands.  The same could be said of the “top-down” pressure from International Governmental Organizations (IGOs) such as the European Union and the International Monetary Fund on countries such as Greece and Ireland to enact austerity measures in exchange for bailouts.

(2) The state or domestic level of analysis includes factors such as political institutions, interest groups, public opinion, and political parties.  The ease with which governments can fall in parliamentary systems (as opposed to presidential systems) helps to explain the events of the past week in Greece and Italy.  The anti-austerity attitudes of public opinion and labor unions have led to political instability and a reluctance by some policymakers to agree to the harsh terms imposed by external actors.

(3) The individual level of analysis focuses on the choices, perceptions, and personalities of individuals (normally political leaders and other influential individuals).  The critical decisions by former Greek Prime Minister George Papandreou to (a)  call for a referendum on the bailout plan, and then (b) to withdraw this request and hand over power to an interim government are causal drivers located at the individual level of analysis.  The perceptions and choices by other key players such as German Chancellor Angela Merkel and European Central Bank Chairman Mario Draghi are also important individual-level factors that have shaped, and will continue to shape, the course of this crisis.

What do you think?  Do causal drivers at one level of analysis seem to be particularly influential in the current European financial crisis?  How are variables from different levels interacting to shape outcomes?  Is it possible to model these interactions and predict how all of this will end, or is such a feat beyond the skills of even our best political scientists?

The EU, Ukraine, and the Tymoshenko “Show Trial”

Former Ukrainian Prime Minister and prominent opposition leader Yulia Tymoshenko was sentenced to seven years in prison on Tuesday.

On Tuesday a Ukrainian court sentenced former Prime Minister Yulia Tymoshenko to seven years in prison on “abuse of office” charges that many in the West have dismissed as politically motivated.  Tymoshenko is the leader of the political opposition against President Viktor Yanukovich and a hero of the West-leaning Orange Revolution of 2004.  Like several other former Soviet states, including Russia, Ukraine has stalled in its transition to democracy, with crackdowns on political opposition, restrictions on media freedom, and an erosion of basic civil liberties rendering the country an illiberal democracy in the eyes of many observers.

Although there are rumors that the sentence could be reversed in the coming days, the “show trial” of Tymoshenko has angered many European leaders and threatened to derail two pending agreements on free trade and closer association between the European Union and Ukraine.

Financial Times foreign affairs blogger Gideon Rachman argues that the EU bears some responsibility for the corruption and authoritarian backsliding in Ukraine.  He contends that International Governmental Organizations (IGOS), like the EU, can influence states’ domestic politics and internal development.  By refusing to even give Ukraine “candidate status” in the EU, the European Union failed to provide encouragement that “would have hugely strengthened the  reformers and the democrats in Ukraine.”  Rachman goes on to argue:

“[Such support] would also have allowed the European Commission to provide masses of  technical assistance to the Ukrainian authorities, as they adapted their laws to  meet the Brusssels “acquis”. That would have given a big boost to the rule of  law in Ukraine because -as many of the countries of Central Europe  discovered – the process of applying to join the EU is, in itself, a  powerful driver of internal political and economic reform.”

What other examples of links between states’ domestic politics and international organizations can you identify?  Is Rachman correct in blaming the EU for Ukraine’s sputtering democratic transition?  What is Ukraine’s alternative to closer ties with the West if the Tymoshenko verdict is not reversed and if European leaders insist on punishing Ukraine?

The Politics of Parliamentary Systems

Canadian Prime Minister Stephen Harper

Two parties fell from power last week, trigging election. In Portugal, the government of Prime Minister José Sócrates fell after a no-confidence motion was passed by the five opposition parties over spending cuts and tax increases intended to address the ongoing economic crisis in the country. A general election looks likely to take place in May or June. Meanwhile, in Canada, Stephen Harper’s minority Conservative government fell after three opposition parties passed a no-confidence motion in response to a finding in the House of Commons that found Harper’s government in contempt of parliament. Harper’s government was found to have provided falls information to parliament on at least three separate occasions. New elections are scheduled to take place on May 2.

The collapse of Sócrates’ government in Portugal and Harper’s government in Canada highlight both the strengths and weaknesses of parliamentary systems. Unlike presidential systems, where legislative terms are fixed and elections are set according to a regular schedule, parliamentary systems usually only have a maximum length of time between elections, normally five years. Elections can—and indeed, often do—come earlier. The government may call an early election if it feels that doing so can give it a larger majority in parliament. And opposition parties may force an early election by passing a no-confidence motion.

Both country’s upcoming elections should provide interesting political theatre. In Canada, public opinion polling is suggesting that Harper’s Conservative Party will likely win a plurality of seats but be denied an absolute majority in the House of Commons, the country’s parliament. If this happens, it will either be forced to seek coalition partners to establish a government, or (more likely) it will try to rule as a minority government again. The problem is that minority governments are inherently unstable, as the government is forced to cobble together a majority vote on every issue from an unstable and often shifting group of Members of Parliament from other parties.

In Portugal, the stakes are perhaps even larger. There, the collapse of Sócrates’ government came just days before the European Union was scheduled to decide on a rescue package for the Portuguese economy. That package, which was conditioned on the government of Portugal enacting strict (and widely unpopular) austerity measures, now appears to be in jeopardy. But the ability of the E.U. to discipline the government of Portugal may be limited, as any spillover of the economic crisis from Portugal could endanger the stability of the euro, the common currency used in fifteen E.U. economies, including Spain, France, and Germany.

The Challenge of a Two-Speed Europe

German Chancellor Angela Merkel and French President Nicolas Sarkozy at the Summit of EU Heads of State.

The recent spate of crises in the European Union has once again raised questions about the future of the European Union. As Greece and Ireland struggle to rebuild their economies, the debate over the future of the European Union is once again on the stage. At one extreme, Germany and France continue to push for further integration, particularly within the eurozone, the group of seventeen countries using the euro as their unified currency. At the other end, euroskeptics in the European Parliament continue to debate the need for the EU in the first place. Governments in the United Kingdom and many of the former Soviet-bloc countries appear to be hesitant about further economic integration.

This tension, which has long been known as the problem of a two-speed Europe, has become more pronounced in light of recent economic crises and the pressure placed on the euro by the collapse of the Greek and Irish economies. Blogging at the Finanical Times, Philip Stephens points out  that the euro has to date been maintained largely by the sheer will of the German government and its willingness to devote considerable resources (not to mention foreign policy clout) to support the euro and prop up several of the weaker European economies.  Euroskepticism, in other words, has not reached the German Länder. This is not to suggest that German magnanimity is the basis of the euro…Germany clearly benefits as well, as its exports to the rest of the eurozone indicate. But what happens if Germany decides that the euro is no longer a core part of its foreign policy vision?

Or more to the point, is the euro in danger? There is good reason to believe that future crises are in store for the eurozone. The economies of Portugal, Italy, and Spain leave considerable room for concern.

A far more likely scenario, however, would be the continued development of a two speed Europe, with France and Germany leading the charge for a more integrated economic policy within the eurozone, while Britain, the Scandinavian states, and many of the former Soviet-bloc countries, standing on the sidelines of economic integration while moving forward with political union. Certainly some interesting things to consider.

Reforming the International Monetary Fund

Dominique Strauss-Kahn, Managing Director of the IMF

There’s a showdown brewing at the International Monetary Fund (IMF). The organization, which is responsible for overseeing the global financial system, stabilizing exchange rates and balance of payments, is at a standoff over the appropriate size of its executive board. The board is arguably the most powerful body within the fund, as it is responsible for conducting the day-to-day affairs of the IMF. By tradition, the Managing Director of the IMF is a European, while the First Deputy Managing Director is an American (similarly, the World Bank President has traditionally been an American). Constitutionally, there are 20 members of the board, though a series of ad hoc decisions which must be renewed every couple of years, the number of seats was expanded to 24.

There’s the rub. The European Union, which currently holds 9 of the 24 seats on the board, wants to renew the agreement. The United States, arguing in favor of a more streamlined decision-making process, objects. Due to the voting procedures in the IMF, the United States effectively holds a veto over the body’s decisions. All decisions of the IMF must be made by an 85 percent supermajority, and the United States holds 16.74 percent of the votes. (The voting structure and board composition is detailed on the IMF website).

The likely losers in the reform process are the small European states, like Belgium and the Netherlands, which would see their seats merged with a larger European power, most likely Germany. “Musical deck chairs,” as the Global Dashboard describes it. And given the ongoing controversy over Germany’s push for fiscal austerity, this would not likely be well-received.

The United States, however, gains in other ways. According to a report by the Economist’s Free Exchange, the reforms would also give the United States greater clout with developing countries, which have been pushing to reform the voting structure of the IMF for years.

America also gains subtly by taking the side of emerging economies. They might be less likely, for example, to make a big fuss about America’s effective veto at the fund. This is something some have been highlighting as a rule that needs to change—but perhaps now that America is using its veto to make emerging countries’ case, they might prefer to pipe down about what a terrible thing it is. Which would probably suit America just fine.

The current voting structure of the IMF gives Belgium (2.08% and the Netherlands (2.34%) greater input than Mexico (1.43%), Brazil (1.38%), and South Korea (1.38%). Not to mention the fact that many IMF members have less than 1/10 of a percent of a vote. Zambia, for example, has 0.23 votes, Vietnam 0.16 votes, Uganda 0.09 votes, and so on. Even South Africa—the largest economy on the African continent—has just 0.85 votes. (For a complete list of the IMF weighted votes by country, see the IMF website).

And that is, of course, the tragic irony: the countries most affected by IMF policy have the least input in its decision-making processes. The countries most likely to need IMF assistance, and therefore most likely to be subject to the austerity measures imposed as a condition of receiving that assistance, have virtually no input in crafting the nature of those conditions, let alone influencing broader IMF policy.

Some redistribution of seats is certainly necessary. As David Bosco notes, Europe is over-represented and the developing world, particularly East Asia, is under-represented in the current IMF voting system. But does reducing the size of the board address this inequality? Not really. Even with the changes, the developing world continues to lack real input into the decisions of the IMF. The United States continues to have its de facto veto. The position of the other major powers in the IMF (Japan, Germany, France, the United Kingdom) remains unchanged. European control of the Managing Director position remains intact. And the developing world continues to be affected by the decisions of the IMF without having any real input into making those decisions. Under these conditions, the “failure” of developing countries to take “ownership” of the economic reform process—a criticism widely cited as the reason for the failure of structural adjustment in IMF reports—is hardly surprising. Why take ownership of a process and policy you had little input in crafting?