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Reforming the IMF: Lessons from Modern Central Banking

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  • Philipp Maier
  • Eric Santor

Abstract

The authors examine the institutional and governance framework of modern central banks to determine whether there are lessons that can be applied to the International Monetary Fund's (IMF's) institutional framework. Such a comparison is appealing for two reasons. First, both central banks and the IMF carry out tasks that can be described as "delegated responsibilities." Second, while monetary policy has yielded mixed results in many countries for decades, it has recently enjoyed considerable success in reducing inflation. Substantial changes to the institutional frameworks of central banks have, at least partly, contributed to this success. This raises a simple question: can the lessons learned from modern central banking help to strengthen the governance of the IMF? The authors argue they can. Governance reform would enhance the IMF's decision-making process and make the Fund more transparent and accountable, thus improving the effectiveness of its main instruments -- surveillance and lending. The reforms proposed by the authors in this paper should not be viewed as immediately achievable goals; rather, they constitute a set of guiding principles for long-term governance reform.

Suggested Citation

  • Philipp Maier & Eric Santor, 2008. "Reforming the IMF: Lessons from Modern Central Banking," Discussion Papers 08-6, Bank of Canada.
  • Handle: RePEc:bca:bocadp:08-6
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    References listed on IDEAS

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    7. Mr. Carlo Cottarelli, 2005. "Efficiency and Legitimacy: Trade-Offs in IMF Governance," IMF Working Papers 2005/107, International Monetary Fund.
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    12. Walsh, Carl E, 2003. "Accountability, Transparency, and Inflation Targeting," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(5), pages 829-849, October.
    13. Robert Lavigne & Philipp Maier & Eric Santor, 2007. "A Vision for IMF Surveillance," Staff Working Papers 07-37, Bank of Canada.
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    Cited by:

    1. Robert Lavigne & Lawrence L. Schembri, 2009. "Strengthening IMF Surveillance: An Assessment of Recent Reforms," Discussion Papers 09-10, Bank of Canada.
    2. Pierre L. Siklos, 2011. "Transparency is Not Enough: Central Bank Governance as the Next Frontier," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 5, Edward Elgar Publishing.
    3. Robert Lavigne & Philipp Maier & Eric Santor, 2007. "A Vision for IMF Surveillance," Staff Working Papers 07-37, Bank of Canada.
    4. Robert Lavigne & Philipp Maier & Eric Santor, 2009. "Renewing IMF surveillance: Transparency, accountability, and independence," The Review of International Organizations, Springer, vol. 4(1), pages 29-46, March.

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    • F3 - International Economics - - International Finance

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