G-20 agrees to IMF reforms
One of the more concrete outcomes of last week’s G-20 ministerial meeting in Korea was an agreement on changes in IMF governance, which managing director Dominique Strauss-Kahn called "the biggest reform ever in the governance of the institution." The months-long U.S.-led effort to shift power from what it considers overrepresented European states to emerging economies ...
One of the more concrete outcomes of last week's G-20 ministerial meeting in Korea was an agreement on changes in IMF governance, which managing director Dominique Strauss-Kahn called "the biggest reform ever in the governance of the institution." The months-long U.S.-led effort to shift power from what it considers overrepresented European states to emerging economies resulted in agreement to transfer two of the 24 board seats from Europe to emerging economies and to increase emerging economy voting share by at least six percent (although this may not be completed until 2012).
One of the more concrete outcomes of last week’s G-20 ministerial meeting in Korea was an agreement on changes in IMF governance, which managing director Dominique Strauss-Kahn called "the biggest reform ever in the governance of the institution." The months-long U.S.-led effort to shift power from what it considers overrepresented European states to emerging economies resulted in agreement to transfer two of the 24 board seats from Europe to emerging economies and to increase emerging economy voting share by at least six percent (although this may not be completed until 2012).
It’s still not clear which European countries will lose their executive directors, though speculation is focused on Belgium and the Netherlands. (There are reports that the two might consider joining forces to retain a place at the table.) Nor is it clear who will fill the two soon-to-be-vacant board seats, although Strauss-Kahn suggested recently that Turkey would be a "good candidate."
Given that formal votes at the Fund are conducted on the basis of voting share, rather than board seats, it’s easy to see all the jockeying over seats as a bit silly. But an IMF official recently reminded me that formal votes are rare and that, for the most part, the organization runs by consensus. The give-and-take in board meetings can be significant and executive directors with little voting power can, by dint of experience and expertise, "punch above their weight." Having a voice in the board room matters, and the jostling for seats will continue.
David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist
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