Issues in IMF Reform
New Economist notes a conference and background paper addressing IMF reform:
How to reform the IMF, New Economist: The International Monetary Fund, once the pre-eminent multilateral financial institution, faces an identity crisis. How to make it strong and effective again? Ahead of this weekend's World Bank-IMF annual meeting, the Institute for International Economics has organised a one-day Conference on IMF Reform. A 93 page background paper for tomorrow's event, by Edwin M Truman, is now available: International Monetary Fund Reform: An Overview of the Issues (PDF). Truman argues that "the IMF is in eclipse" and "consequently, the world is worse off. Despite the considerable reforms over the past decade, more should be done." But simple measures won't not enough - reform is needed across a range of areas:
No single step or magic formula will restore the IMF to its prior position as a highly respected institution. Effective reform of the IMF must encompass many aspects of the IMF’s activities—where it should become more as well as less involved. Over the past decade, a large number of changes in the international financial architecture and in the IMF’s operations have been put in place. Those reforms have not been sufficient to restore the IMF to the center of today’s international monetary and international financial system, assuming that was the intentions of the reformers. Successful reform of the IMF must engage the full spectrum of its members. The IMF should not focus primarily on its low-income members and the challenges of global poverty. It should not focus exclusively on international financial crises affecting a small group of vulnerable emerging market economies. Instead, it must be engaged with each of its members potentially on the full range of their economic and financial policies emphasizing primarily those policies that impact the functioning of the global economy.
A major priority is IMF governance. An equally important priority is to upgrade the IMF’s role in the international monetary system. In addition, improvements should be made in IMF lending operations, and the IMF must be pulled back from becoming just another development financing institution. The IMF’s financial resources will soon need to be augmented.
Posted by Mark Thoma on Thursday, September 22, 2005 at 12:25 AM in Academic Papers, Economics, International Finance, Policy |
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