published_or_final_version / Asian Studies / Master / Master of Arts

This dissertation is concerned with international financial crisis response and the role that formal and informal international institutions play in this process. It is about understanding the potential of and limits to international crisis governance. It tries to answer three interrelated questions. First, what are the mechanics of international crisis lending? Second, what role can international institutions play in effectively distributing information so that policy responses can be optimized? Finally, what crisis governance structures are best suited to economic and political circumstances of the global financial system? In order to address these questions this dissertation uses a combination of formal (game theory) and informal theory building. It then examines these theoretical arguments using an empirical analysis based on historical survey of crisis response since the late nineteenth century and a comparative case study of crisis management during the Great Depression (1930-31) and the Asian Financial Crisis (1997-98). With regard to the first question, it argues that crisis lending is not simply shaped by the interaction of crisis lenders and borrowers. Ultimately, the terms of a crisis loan are negotiated in a space whose limits are determined by two additional actors: international investors/speculators and domestic political opposition. With regard to the second, it argues that both formal and informal international institutions play an important role in disseminating information and thus policy adaptation and change. However, there are clear limits to what institutions can do. In practice, this means that the goal of creating a crisis-free system is impossible. Finally, with regard to the broad question of crisis governance, it argues that the most effective financial governance system is one build around a partnership between a concert of key financial powers and an international financial institution dedicated to maintaining stability in the financial system.