Money Talks: The International Monetary Fund, Conditionality, and Supplementary Financiers; A Strategy for IMF Reform
By Erica R. Gould, Edwin M. Truman
The International Monetary Fund is a key institution in today's globalized economy. IMF reform, including questions of governance and the allocation of votes, as well as the IMF's mode of operation in a world of greatly enlarged movements of capital, is on the active agenda of international financial officials. These two books -- one forward-looking, the other mainly historical -- provide important material for this ongoing deliberation.
The book by Gould analyzes a new and useful set of data she has compiled on the policy conditions IMF borrowers have agreed to in exchange for IMF financial support. These conditions have become both more numerous and more specific over time, but there are important differences among borrowers. Gould's thesis is that major sources of supplementary finance in periods of crisis -- bilateral donors, private banks, other international institutions -- have increasingly influenced these conditions. The IMF does not have the financial ability to deal with many of today's financial crises alone.
Truman, a former senior official of the Federal Reserve and the U.S. Treasury, warns against assuming that the relatively benign international monetary conditions of the last several years will continue indefinitely. He addresses directly the various aspects of the IMF's structure, procedures, and decision-making that should be considered in any thorough reform of the institution. He offers thoughtful treatment of those technical but nonetheless vital issues, including lending capacity and lending criteria, that the IMF must address if it is to continue to play a significant role in the world economy.