IMF quotas: Constructing an international organization using inferior building blocks
The International Monetary Fund’s structure and rules are based on the quota system that was constructed when the Fund was set up in 1946. Quotas affect contributions and resource availability at the Fund, access to resources, the distribution of Special Drawing Rights, and voting rights. Despite periodic reviews and modifications, the quota system has gradually been eroded and undermined. The fundamental problem is that a single system is attempting to serve four separate and incompatible functions. We illustrate how this erosion has taken place, and how an unreformed quota system will compromise the future operations of the IMF and the international monetary and financial system. Although the difficulties associated with reforming quotas are myriad and complex, the legacy of an unreformed quota system may be profoundly undesirable. We argue that a refined IMF structure must accommodate a clearer separation of a member’s contributions to the IMF, its access to IMF resources, and its voting rights at the institution.
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Volume (Year): 1 (2006)
Issue (Month): 2 (June)
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- Vijay Kelkar & Vikash Yadav & Praveen Chaudhry, 2004. "Reforming the Governance of the International Monetary Fund," The World Economy, Wiley Blackwell, vol. 27(5), pages 727-743, 05.
- Roland Vaubel, 1996. "Bureaucracy at the IMF and the World Bank: A Comparison of the Evidence," The World Economy, Wiley Blackwell, vol. 19(2), pages 195-210, 03.
- Graham Bird & Dane Rowlands, 2001. "Catalysis or Direct Borrowing: The Role of the IMF in Mobilising Private Capital," The World Economy, Wiley Blackwell, vol. 24(1), pages 81-98, 01.
- Graham Bird & Dane Rowlands, 2002. "Do IMF Programmes Have a Catalytic Effect on Other International Capital Flows?," Oxford Development Studies, Taylor & Francis Journals, vol. 30(3), pages 229-249.
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