BEGIN:VCALENDAR VERSION:2.0 PRODID:-//Talks.cam//talks.cam.ac.uk// X-WR-CALNAME:Talks.cam BEGIN:VEVENT SUMMARY:Conceptualising EU/IMF Financial Assistance Negotiation in Latvia - Samuel Dahan DTSTART:20120228T170000Z DTEND:20120228T180000Z UID:TALK36473@talks.cam.ac.uk CONTACT:Sheryl Anderson DESCRIPTION:I. How the topic will be addressed: detailed outline\nThis pap er highlights the preconditions for a successful EU/IMF financial assistan ce programme by providing an analytical approach to the negotiation proces s for financial stabilisation in Latvia. We believe that auditing the nego tiation process may help us to understand and improve the negotiation capa bility of an organisation. For instance\, decision-makers engaged in a fin ancial assistance negotiation might need to place a high priority on pinni ng down the difference that the process makes\, net of other influences\, to the outcome. Measuring decision-making successes and failures requires first choosing a conceptual framework for the analysis. Such a framework w ould allow for the testing of hypotheses concerning the negotiation proces s based on evidence from actual experience\, in addition to laboratory evi dence.\nThe paper is structured as follows: The first part constructs an a nalytical framework for conceptualising financial stabilisation negotiatio ns. It then outlines the various international negotiation strategies that can be used by recipients and lenders in order to affect the outcome. It also discusses the importance of actors’ negotiation ‘capability’ in shaping negotiation strategies and outcome. The second part presents find ings on the Latvian case with a brief review of the negotiation process an d outcome in the form of a description of policy interaction with policy c ircles and a review of core areas of policy conditionality. The paper then explains the factors that account for the negotiating strategies attempte d by the IMF\, the DG ECFIN\, the Latvian Government and the Social Partne rs\, as well as their influence on the outcome. It also draws comparative evidence from other country cases. Finally\, it concludes by summarising l essons that can be learnt from the negotiation process surrounding financi al assistance in Latvia.\n1 - Conceptualising financial stabilisation nego tiations\nThis paper does not present a new model of lenders-recipients re lations that can predict the outcomes of financial assistance negotiations \, but rather suggests a means to discuss issues concerning the political economy of financial stabilisation. Our contribution does not start form t he assumption that ‘best policy exists’. Instead\, our country study o n Latvia intends to identify the bases of actors’ policy preferences and the underlying motivations for their negotiation strategies.\nA Typology of Negotiation Strategies\nStrategies are part of the process of negotiati on which encompasses a sequence of actions in which parties address demand s and proposals to one other for the purpose of reaching an agreement chan ging the behaviour of at least one actor (Odell\, 2002). Built on existing typologies\,1 we conceive all behavioural strategy options as being repre sented along a simplified continuum ranging between two polar ideal types: competitive behaviour (or distributive) and cooperative behaviour (or int egrative). At one pole is the pure competitive strategy: a set of actions that promote the attainment of one party’s goal at the expense of\n1 Dis tributive versus integrative bargaining (Walton and McKersie\, 1965\; Da C onceição-Heldt\, 2006)\, value claiming versus value creating (Lax and S ebenius\, 1986\; Odell\, 2000)\, bargaining versus problem solving (Hopman n\, 1995\; Elgström and Jönsson\, 2000). bargaining versus arguing (Mül ler\, 2004\; Kotzian\, 2007) and strategic action versus communicative act ion (Niemann\, 2004).\nthose of the other parties. At the opposite pole is the pure cooperative strategy which involves actions to expand the pie an d promote the mutual attainment of negotiation goals.\nThis typology will facilitate empirical research into the determinants of the choice of negot iation strategies by both breaking down negotiation behaviour into clearly observable actions and moving away from assumption about the underlying i ntentions of the actors.\nOrganisational capabilities: what is shaping neg otiation strategies?\nA major step in analysing the link between the proce ss and the successful outcome in Latvia is the development a clear underst anding of the factors outside the negotiation process that affect the posi tions of actors\, the negotiating strategies they fashion\, and the succes s of those strategies. Such factors do not determine the outcome of any ne gotiation in a mechanistic sense. Rather\, they present lenders and recipi ents with ‘organisational capabilities’ to consider in deciding what t hey think they can achieve through the negotiation. Such resources constit ute the leverage that negotiating organisations are able use during the ne gotiation process.\nBased on theory of negotiation\, we outline the main n egotiating resources that lenders and recipients have at their disposal an d how far these resources affect negotiation strategies and outcome: (1) t he overall power of the recipients and lenders\, (2) the policy preference s and ideologies of the parties\, (3) the criteria of justification used b y the parties to legitimise their solutions to the crisis\, (4) the best a lternative to a negotiated agreement (BATNA)\, (5) the mandate or the cons traints imposed upon the negotiators\, and finally\, (6) the control actor s may have over the process.\n(1) There is no doubt that resources\, or wh at has been called ‘aggregated structural power’ (Habeeb\, 1988) are a n important source of negotiating power. For instance\, it can be assumed that larger countries dispose of greater economic and political power than smaller countries.\n(2) The ideological resources\, domestic politics and geopolitical factors on which both the lenders and recipients are able to draw in their negotiation all play important roles. Our country study wil l demonstrate how interests and motivations are prioritised shaped by the global\, national economic\, political and ideological contexts in which e ach actor and the negotiations themselves are embedded.\n(3) Criteria of j ustification in which parties embed their positions play also a significan t role. We refer to objective arguments that parties use to anchor/strengt hen their positions. Lenders typically find it hard to challenge a recipie nts’ priority that are constructed with arguments\, particularly one tha t draws strengths from a wider international discourse that might contradi ct lenders preferences. One may notice that objective criteria are relevan t when they are shared and understood by all the parties. In the context o f the financial crisis\, the absence of shared criteria of justification a mong economists is a major issue. The international macroeconomic discussi on seems to be harmful for financial assistance negotiation.\n(4) Another important source of leverage is the best alternative to a negotiated agree ment (Fisher and Ury\, 1981). The BATNA is determined by the availability of options outside the negotiation table\, that is to say a plan B. Simpli fying\, the parties that lose less in the event of a breakdown of the nego tiation tend to have a better BATNA. In the case of a financial assistance programme\, the BATNA of the recipients is generally weak since the EU/IM F plan is often a last resort solution.\n(5) Recipient governments that ar e constrained by a strict domestic mandate\, such as a finely balanced coa lition\, powerful interest groups\, or a weak electorate\, may also be abl e to use these constraints to gain leverage and adopt a competitive strate gy. For example\, the degree to which the population of a Member State is Eurosceptic is a possible proxy for the domestic constraints that governme nts face.\n(6) This framework also recognises the importance of the actors ’ control over the process of financial stabilisation negotiation: agend a-setting\, policy formulation\, implementation\, evaluation and revision. However\, we focus particularly on the agenda-setting and policy formulat ion stages because these stages involve the strongest form of recipient-go vernment control over its national development strategy and policies. Reci pient strategies of non-implementation of the negotiated policies or ones that focus on leveraging influence during the implementation in order to a lter the policies to meet the recipient government’s objectives are impo rtant because they illustrate recipient leverage over its policy agenda. A t the same time\, these are a weak form of control.\n2 - Experiences and s trategies in the Latvian stabilisation negotiation\nOutcome\nThe negotiati on outcome\, in its most general sense\, means whether the interactions en ded in agreement or deadlock\, and how much was gained or lost by each par ty and by the group of parties as a whole. How much negotiators gained or lost is understood most often by reference to the status quo prior to the talks. Is the party better off\, worse off\, or about the same as before? For instance\, we will investigate the core areas of policy conditionality (fiscal\, monetary\, financial sector and structural reforms) and discuss what could have been the outcome without an assistance programme in Latvi a. Outcome variation may also be observed by means of comparative case stu dies. This can be achieved by comparing the Latvian outcome with other Mem ber States engaged in financial stabilisation negotiation.\nDecision-makin g process in action\nThe country study intends to provide a ‘thick descr iption’ that reconstructs decision-making processes as far as possible b y accessing the perspectives and strategies of the IMF\, DG ECFIN and the Latvian actors.\nII. Theoretical and empirical techniques\nThe conclusions on the audit of the negotiation process in Latvia will be drawn from a wi de range of policy\, organisational learning and negotiation literature. T hey will be combined with intensive ethnographic field research\, intervie ws and experience working in the field of multilateral negotiation. This q ualitative approach is adopted because the investigation of the financial stabilisation process cannot be turned into a series of qualitative indica tors. However\, the experiences of the various countries engaged in a fina ncial assistance negotiation process can be compared and the strengths and weaknesses of their negotiating strategies\, as well as the factors accou nting for them\, can be discussed in relation to each other.\nIII. Policy relevance of the analysis\nUnfortunately\, organisations (public or privat e) have no systematic approach to learning from their decision-making proc esses or negotiation experiences. We argue that negotiation is an organisa tional capability. Consequently\, organisations should invest in organisat ional changes and learning in ways that help them to get consistently bett er outcomes. This requires the organisational leaders to shift from thinki ng about the negotiation process as solely a matter of individual skill at the table to thinking about negotiation as a matter of organisational com petence that requires building and adjusting processes to encourage best p ractices and continuous improvement. It requires conducting a brief but ca reful audit of how negotiations are being conducted across the organisatio n. And it requires producing a set of recommendations that respond to the problems that are revealed by the audit. In the case of the DG ECFIN\, the assessment of the financial assistance negotiations (in Latvia and elsewh ere) will help to highlight the main reasons behind the successes and fail ures of financial assistance programmes and might help to draw lessons for both the organisation as a whole and other lenders.\n\ntrinity-crop1.jpg\ n LOCATION:Lucia Windsor Room\, Newnham College END:VEVENT END:VCALENDAR