centro studi luca d’agliano development studies working papers.pdf

WWW.DAGLIANO.UNIMI.IT CENTRO STUDI LUCA D’AGLIANO DEVELOPMENT STUDIES WORKING PAPERS N. 357 October 2013 Does it Take Two to Tango? Improving Cooperation between the IMF and the World Bank: Theory and Empirical Evidence Silvia Marchesi * Laura Sabani** * University of Milan Bicocca and Centro Studi Luca d’Agliano ** University of Florence ISSN 2282-5452 Does it take two to tango? Improving cooperation between the IMF and the World Bank: theory and empirical evidence Silvia Marchesi Universit‡ di Milano Bicocca and Centro Studi Luca díAgliano Laura Sabani Universit‡ di Firenze October 2013 Abstract This paper analyzes the impact of di§erent governance structures on the degree of Bank-Fund cooperation, focusing on the quality of their information transmission. It compares the performance of a decentralized governance with that of a centralized one. A centralized structure better addresses the necessity of coordinating policy actions, but greater consistency in policy actions will be achieved at the expenses of a less satisfactory adaptation to local conditions. It is shown that when the need for coor- dination is relevant, a centralized governance allows to achieve a greater level of overall payo§s. In the real world the governance structure of the two in