Why it Matters Who Runs the IMF and the World Bank - Working Paper 22

Increasing integration has made the great challenge of reducing poverty and advancing human development more achievable than ever, and more dependent than ever on good global economic governance. In this paper I set out the economic logic for why good global economic governance matters for reducing poverty and inequality and argue that a step towards better global governance would be better representation of developing countries in global and regional financial institutions. The Inter-American Development Bank, where the developing country borrowers control 50 percent of the votes and the Presidency, suggests some of the likely effects of better representation in ownership of economic and social programs supported by multilateral institutions, and on their overall effectiveness and legitimacy. I close with a discussion of the dilemma of reconciling the financial power and thus accountability of rich countries with stronger poor country representation.