Sir, Larry Summers, writing in the Economists' Forum ("Why not suppress the fund's board altogether?", September 27), notes that lenders reasonably set lending terms, and worries that support for the International Monetary Fund from the US and the other traditional powers would flag were there a tilt toward greater leverage for borrowers - who do, after all, benefit from the financial backing of the non-borrowers. But there are many options between the one country-one vote system at the United Nations, with its costs in effectiveness and fragile financial support, and the near-complete lack of any leverage at all for borrowers at the IMF, with its cost in lack of legitimacy.
At the Inter-American Development Bank, where 50 per cent of voting shares are now held by borrowers, the US and other non-borrowers are still able to ensure reasonable terms of lending, while borrowers' sense of ownership provides legitimacy.
Moreover, the borrowers insist on more discipline on the Bank's own administrative spending (thus holding down borrowing costs) than is evident at the IMF and the World Bank.
At the IMF a system of double majorities (majority of votes, majority of countries) for at least some decisions would generate a similar dynamic. Imagine the effect were it to require that the major powers engage other countries including small borrowers in such key decisions as the choice of the managing director.
Beyond the discussion about quota allocations and a new formula for assigning them, surely there are other ways to minimise the trade-off between legitimacy and financial sustainability at the IMF.