Professor Daniel Bradlow presented his ideas for reforming the IMF at a workshop on Friday organized by the New Rules for Global Finance coalition. Based on his paper - The Changing Role of the IMF in the Governance of the Global Economy and its Consequences (pdf) - he argued that the IMF has slowly mutated from a global monetary organization into a macro-economically oriented development financing institution but has not yet sufficiently recognized the implications of these changes. As a result, its decision-making and governance structures, and its existing interpretation of its mandate, no longer fit well with its current functions. He identifies five consequent “distortions” that are undermining its effectiveness:
- legal problems such as the principle of uniformity of member treatment and the lack of clarity of how political considerations are taken into account in IMF decisions;
- relations with industrialized countries, which he notes are now only suppliers of financing to the IMF, with little need to heed its advice;
- relations with those developing countries that are heavy consumers of IMF financing, where the IMF, in its gatekeeper role, has become much more heavily involved in the policy dialogue without corresponding changes in its way of doing business and accountability,
- relations with citizens of member countries (where there is no effective accountability now that the range of policy discussions has stretched well beyond ministries of finance and central banks, and where clear channels of communication for non-state actors are lacking); and
- relations with other international organizations.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.