Bad Mandates
When the founders of the International Monetary Fund (IMF) met in Bretton Woods in 1944, they probably didn’t imagine that the institution they created would one day help lead the fight against female genital mutilation. But that goal is just one of many that the U.S. Congress now wants the IMF to pursue. In fact, ...
When the founders of the International Monetary Fund (IMF) met in Bretton Woods in 1944, they probably didn't imagine that the institution they created would one day help lead the fight against female genital mutilation. But that goal is just one of many that the U.S. Congress now wants the IMF to pursue. In fact, according to a January 2001 report by the U.S. General Accounting Office (GAO) titled "International Monetary Fund: Efforts to Advance U.S. Policies at the Fund," 60 current provisions prescribe U.S. policy goals for the IMF. These cover everything from the promotion of U.S. clean coal technology to "respect for indigenous peoples."
When the founders of the International Monetary Fund (IMF) met in Bretton Woods in 1944, they probably didn’t imagine that the institution they created would one day help lead the fight against female genital mutilation. But that goal is just one of many that the U.S. Congress now wants the IMF to pursue. In fact, according to a January 2001 report by the U.S. General Accounting Office (GAO) titled "International Monetary Fund: Efforts to Advance U.S. Policies at the Fund," 60 current provisions prescribe U.S. policy goals for the IMF. These cover everything from the promotion of U.S. clean coal technology to "respect for indigenous peoples."
The mandates span more than 50 years, but more than half were enacted over the last decade — the result of what one former senior Treasury Department official in the Clinton administration called a "Faustian bargain" to ensure congressional support for continued IMF funding. Twenty-one of the mandates require the U.S. executive director of the IMF to oppose a country’s access to IMF resources if that country is considered in violation of U.S. strictures.
The GAO report suggests that legislative mandates in areas outside the IMF’s charter can hinder more than help. They limit U.S. flexibility in times of crisis — for example, forcing the U.S. executive director to push Indonesia on military audits while the country was suffering a financial meltdown. And they breed cynicism about U.S. behavior, which other IMF members assume is driven by legislative requirements rather than an assessment of actual conditions. One last problem that the GAO report fails to mention: The mandates are permanent, with no sunset provisions or review mechanisms.
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