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Rethinking the Governance of the International Monetary Fund

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  • Abbas Mirakhor
  • Iqbal Mehdi Zaidi

Abstract

This paper attempts to set out the principal issues that need to be resolved in formulating a proposal for quotas and voice reform in the IMF that could command broad support. Following John Rawls, we argue that "justice is the first virtue of social institutions," and we use his theory of justice to provide a method for understanding what should be the case, in the context of voice and voting shares, before international institutions, such as the IMF, are to be justifiable to their members. The implementation of this process suggests, among other things, that a major revision of the quota formulas is long overdue, and leaving this unaddressed raises serious questions regarding the IMF's governance which could develop into a core mission risk and jeopardize the relevance of the institution.

Suggested Citation

  • Abbas Mirakhor & Iqbal Mehdi Zaidi, 2006. "Rethinking the Governance of the International Monetary Fund," IMF Working Papers 06/273, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:06/273
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    References listed on IDEAS

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    3. Krugman, Paul, 1979. "A Model of Balance-of-Payments Crises," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 11(3), pages 311-325, August.
    4. Caballero, Ricardo J. & Krishnamurthy, Arvind, 2001. "International and domestic collateral constraints in a model of emerging market crises," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 513-548, December.
    5. Barry Eichengreen & Ricardo Hausmann, 1999. "Exchange rates and financial fragility," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 329-368.
    6. Steven Radelet & Jeffrey Sachs, 1998. "The Onset of the East Asian Financial Crisis," NBER Working Papers 6680, National Bureau of Economic Research, Inc.
    7. Flood, Robert P. & Garber, Peter M., 1984. "Collapsing exchange-rate regimes : Some linear examples," Journal of International Economics, Elsevier, vol. 17(1-2), pages 1-13, August.
    8. Maurice Obstfeld, 1994. "The Logic of Currency Crises," NBER Working Papers 4640, National Bureau of Economic Research, Inc.
    9. Peter B. Kenen, 2001. "International Financial Architecture: What's New? What's Missing?, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 335.
    10. Catherine A Pattillo & Andrew Berg & Gian M Milesi-Ferretti & Eduardo Borensztein, 2000. "Anticipating Balance of Payments Crises--The Role of Early Warning Systems; The Role of Early Warning Systems," IMF Occasional Papers 186, International Monetary Fund.
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    Cited by:

    1. Daud Vicary Abdullah & Hossein Askari & Abbas Mirakhor, 2015. "The moral foundation of collective action against economic crimes," PSL Quarterly Review, Economia civile, vol. 68(272), pages 9-39.
    2. Nguéma-Affane, Thierry, 2008. "The Principal Components Approach To Quota Formulation At The Imf," MPRA Paper 7618, University Library of Munich, Germany.

    More about this item

    Keywords

    Basic votes; Quota calculations; Quota distribution; Quota formulas; Quota increases; Foreign aid; Governance; International Monetary Fund; Voting power; Transparency; International Monetary Arrangements and Institutions; voting; exchange rates; capital flows; International Economic Order;

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