Voting Power Implications of a Unified European Representation at the IMF
AbstractWe consider some of the implications of a proposed reform of the voting system of the IMF in which EU countries cease to be separately represented and are replaced by a single combined representative of the European bloc. The voting weight of the EU bloc is reduced accordingly. We analyse two cases: the Eurozone of 12 countries and the European Union of 25. Using voting power analysis we show that the reform could be very beneficial for the governance of the IMF, enhancing the voting power of individual member countries as a consequence of two large countervailing voting blocs. Specifically we analyse a range of EU voting weights and find the following for ordinary decisions requiring a simple majority: (1) All countries other than those of the EU and USA unambiguously gain power (measured absolutely or relatively); (2) The sum of powers of the EU bloc and USA is minimized when they have voting parity ; (3) The power of every other non-EU member is maximized when the EU and USA have parity ; (4) Each EU member could gain power - despite losing its seat and the reduction in EU voting weight - depending on the EU voting system that is adopted ; (5) The USA loses voting power (both absolutely and relatively) over ordinary decisions but retains its unilateral veto over special majority (85%) decisions (as does the EU bloc).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 720.
Length: 40 pages
Date of creation: 2005
Date of revision:
IMF ; European Union ; Voting Power Indices ; Penrose Index ; Banzhaf Index;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-06-10 (All new papers)
- NEP-CDM-2006-06-10 (Collective Decision-Making)
- NEP-EEC-2006-06-10 (European Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lorenzo Bini Smaghi, 2004. "A Single EU Seat in the IMF?," Journal of Common Market Studies, Wiley Blackwell, vol. 42(2), pages 229-248, 06.
- Géraldine Mahieu & Dirk Ooms & Stéphane Rottier, 2003. "The Governance of the International Monetary Fund with a Single EU Chair," Financial Stability Review, National Bank of Belgium, vol. 1(1), pages 173-188, June.
- Agnès Bénassy-Quéré & Carlos Bowles, 2002. "A European Voice at the IMF," La Lettre du CEPII, CEPII research center, issue 216.
- Alan Ahearne & Jean Pisani-Ferry & AndrÃ© Sapir & Nicolas VÃ©ron, 2006.
"The EU and the governance of globalisation,"
- André Sapir & Alan Ahearne & Jean Pisani-Ferry & Nicolas Véron, 2006.
"Global governance: an agenda for Europe,"
ULB Institutional Repository
2013/8104, ULB -- Universite Libre de Bruxelles.
- Grech, Harald & Gratz, Herbert, 2006. "Reforming the International Monetary Fund – Some Reflections," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 4, pages 98â118.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Helen Neal).
If references are entirely missing, you can add them using this form.