The Effectiveness of IMF Surveillance

IMF surveillance of the international monetary and financial system is a global public good. Its effectiveness depends critically on the dynamics that underpin the mechanisms governing the IMF and global finance. These dynamics, in turn, reflect the interests and power of influence of countries (especially the largest), their cooperative attitude and international relations. Assessing the effectiveness of IMF surveillance, therefore, demands a clear understanding of the IMF and global financial governance: improving the former requires strengthening the latter. This study considers how the governance of the IMF and global finance can be reformed to increase the effectiveness of surveillance and to strengthen international financial cooperation. The study proposes a configuration of governance with a clearer allocation of responsibilities and stronger mechanisms of power checks and balances. It identifies new roles for the IMFC and the Executive Board, and calls for strengthening management accountability, in particular by decoupling the dual capacity of the Managing Director as chair of the Executive Board and Chief Executive Officer.