ABSTRACT
This chapter examines the impact of political, non-economic factors in International Monetary Fund and International Bank for Reconstruction and Development operations and decisions to lend using the Eastern European members of both organizations as case studies. It presents the context for Bank and Fund lending to the Soviet Bloc by analyzing the views of supporters and critics of these organizations. The chapter also examines two opposing interpretations of Fund and Bank lending decisions with respect to the inclusion of political criteria. The tenets of the functionalist model of international organization provide the basis of the technocratic approach to international economic assistance. Neo-functionalist analysis still retains the basic technocratic functionalist assumptions. The organizational structure of both the Fund and the Bank was, and is, such that policy decisions are formulated by staff and representatives appointed or elected by member states. In the boundary formulation of international lending, the lender continues to control the policy-making process.
