601. The Right Role for the IMF in Development
- Author:
- Nancy Birdsall, John W. Sewell, and Kevin Morrison
- Publication Date:
- 05-2000
- Content Type:
- Policy Brief
- Institution:
- Overseas Development Council
- Abstract:
- Horst Köhler faces immense challenges as the new Managing Director of the International Monetary Fund (IMF). But no challenge is more crucial than making sure the IMF plays the right role in developing countries. Too often, it is not playing that role now. The IMF's activities in the developing world have grown radically. Today, much of its work goes beyond macroeconomic issues and crisis prevention and management, into deeper structural issues. And as a major provider of long-term development finance, it is significantly involved in efforts to reduce poverty. But the IMF lacks expertise in the wide-ranging policy and institutional complexities of development and poverty reduction. Its expertise lies in macroeconomic policy and restoring stability amid financial crises. Macroeconomics is the same for poor and rich countries alike, as IMF First Deputy Managing Director Stanley Fischer has said. But much of what the IMF is involved in now is not macroeconomics. The Fund should focus on: short-term liquidity lending to all countries hit by macroeconomic crises; advising through policy dialogue; and collecting, assessing, and distributing information on countries with regard to macroeconomic policy and financial markets. While poor countries need access to the Fund's short-term lending and macroeconomic advice, the IMF should leave long-term development lending to the World Bank and to other lenders and donors expert in poverty reduction.
- Topic:
- Environment, International Organization, International Trade and Finance, and International Monetary Fund
- Political Geography:
- United States