Substantial foreign aid makes that almost inevitable. Assistance to Moscow may have helped Boris Yeltsin retain power, but it has done precious little to promote real economic reform. Actually, unsubsidized economic failure is a powerful disciplining mechanism. It was crisis, not the IMF, that caused Indonesia, South Korea, and Thailand to begin making painful economic reforms. Without an international bailout, countries otherwise dedicated to doing only the minimum necessary to receive aid, would instead have to adopt all the changes necessary to reassure foreign bankers and investors.
Private pressure works.
I will make it so that foreign investors will invest with confidence. Thailand's evident commitment to reform led foreign investors to begin reentering the market in force in March 1998. This more subtle nature of private pressure would also help shield reform efforts from the xenophobia that so often accompanies IMF programs. Governments would have no one else to blame for their reform programs. In effect, the MDBs are committed to capitalism without loss, the economic equivalent of Christianity without hell.