Postings to this blog are now closed. But efforts to modernize the Bretton Woods institutions to better meet the challenges of the 21st century continue, here at the Center for Global Development, within the institutions themselves, and in the international development community more broadly.
The report of a high-level commission chaired by former Mexican President Ernesto Zedillo and tasked with generating ideas and momentum for reforming the World Bank’s governance was published in October 2009. Johannes Linn summarizes the report well here (and then complains that its remit was too narrow).
With a little distance from the hype of the two important global events of April—the G-20 London Summit and the spring meetings of the IMF and World Bank—it is perhaps easier to judge how effective these jamborees have been in addressing the key challenges of the current financial and economic crisis. Our assessment is that a “global deal” has been struck and that it is one which deserves to be taken seriously.
Suddenly the IMF is very much in the news. The G-20 Summit agreed last week to large increases in resources to enable the Fund to respond to the global crisis. And the week before the IMF Board approved radical changes in access, pricing and conditionality for IMF borrowers, making IMF loans and insurance (precautionary loans immensely more attractive for countries like Brazil and Mexico.
Why have the IMF and the World Bank been so backward on risk management products -- an issue Guillermo Perry explores in a forthcoming CGD book? What is it about their governance, mandate, instruments and/or human nature that leads them like horses to water to lending, even defensive lending, during good times, in effect inviting them, for lack of prior development of insurance and savings products, to "indulge" in a new round of lending in bad times?
Simon Johnson has a terrific statement on why you and I are missing the boat on what’s wrong at the IMF and why we’re not paying enough attention. If you’re interested in reform of governance at the IMF and the World Bank, you’ll see why officialdom (in Europe) is not (now) on your side. Here are excerpts from Simon’s op-ed in the New Republic on-line, which he included in his Baseline Scenario post:
I am pleased to announce the launch of the CGD’s Bretton Woods Non-Commission on Governance Reform of the IMF and the World Bank. The possibility and the options for deep reform of these institutions are greater today than ever. Ironically, this is thanks to the oncoming global economic crisis, which has exposed the limits of their financing, legitimacy and relevance in the 21st century interconnected global economy.
Download (PDF 188 KB)