Joseph Stiglitz

Democratizing the International Monetary Fund and the World Bank: Governance and Accountability

Abstract:
Much has been said about the failing policies of the International Monetary Fund (IMF). In this essay, I attempt to explain why the IMF has pursued policies that in many cases not only failed to promote the stated objectives of enhancing growth and stability, but were probably counterproductive and even flew in the face of a considerable body of theoretical and empirical work that suggested these policies would be counterproductive. I argue that the root of the problem lies in the IMF's system of governance. Thereafter, I discuss how the World Bank managed to reform its agenda in order to fulfill its goals of poverty reduction more successfully, and what lessons this reform holds for the IMF. I conclude by proposing needed reforms for the IMF that might mitigate some of the problems it has encountered in the past.

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