Unfairly indicting the IMF
In today’s FT, Terrence Keeley argues that high-stakes G-20 meetings are a symptom of IMF underachievement. Dominique Strauss-Kahn, head of the IMF, likes to say there are no local solutions to global problems. The Fund has an explicit mandate to promote international rebalancing and adjustment through strict, principle-based foreign exchange surveillance. Inexplicably, it is not ...
In today's FT, Terrence Keeley argues that high-stakes G-20 meetings are a symptom of IMF underachievement.
In today’s FT, Terrence Keeley argues that high-stakes G-20 meetings are a symptom of IMF underachievement.
Dominique Strauss-Kahn, head of the IMF, likes to say there are no local solutions to global problems. The Fund has an explicit mandate to promote international rebalancing and adjustment through strict, principle-based foreign exchange surveillance. Inexplicably, it is not deploying it. Were Mr. Strauss-Kahn compliant with his existing authority, G20 meetings would not have to become risky, high-wire acts of policy debate, presumed legitimacy and dubious enforcement. The global financial architecture would be less clouded-over by nagging doubts and illegitimacy.
This is an awfully tough critique. Ultimately, the Fund’s leadership operates on behalf of its members, and particularly the organization’s major shareholders. Keeley seems to suggest that the Fund’s leadership could, on the basis of a particular reading of the IMF’s articles of agreement, defuse political dynamite by rebalancing the international economy. But like all international organization bureaucracies, the IMF leadership and staff are constrained by the needs and interests of member states. It always runs the risk of alienating powerful states that it needs to keep engaged. As leading scholars Michael Barnett and Martha Finnemore demonstrated in their important recent book, Rules for the World, international organization bureaucracies have some capacity for innovation and autonomy — but not a lot. Keeley may be asking too much.
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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