The Politics of Economic Development: How the U.S. Constrains the Work of International Financial Institutions in Egypt and Jordan

Abstract

This Senior Study examines the political aspect of the international assistance provided by the International Monetary Fund and the World Bank. The Marxist argument is presented to explain the hierarchical nature of these international financial institutions, which allows the United States, the most prominent contributor of funds, to dictate how development programs are carried out. The experiences of both Egypt and Jordan with the World Bank and International Monetary Fund are taken as case studies to examine the many ways that American interests infiltrate and control development packages through unrealistic policies and unfavorable conditions. The aim of this Senior Study is to examine the relationship between international financial institutions and Egypt and Jordan, from the 1980s until the early 2000s, to understand why the proposed development plans did not lead to sustainable development and how the United States played a role in limiting progress. It delves into the flaws of the structural adjustment programs enacted in Egypt and Jordan, and the underlying American interests that prioritized existing political interests over long-term economic advancement. The analysis indicates a high level of American interference in Egypt’s development attempts, which limited the imposition of policy changes in order to safeguard the country’s strategic alliance to the United States. In Jordan’s case, the analysis shows that the Kingdom fell victim to ill-suited policies that ignored the complexities of the struggling nation’s economy to focus on the American interests of economic liberalization and privatization. Hence, the findings of this Senior Study point to the politicization of international financial institutions to work in favor of American interests and indicate a correlation between extensive American involvement in international financial institutions and the failure of struggling states to implement beneficial economic policies and emerge successfully into the globalized world market.