53 Economists write to IMF Directors on approach to Social Protection

The International Monetary Fund (IMF) was formed in 1945 to ensure the stability of the international monetary system. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that may bear on global stability. Since the global crisis, particularly since 2010, the IMF has tackled more and more areas. A recent 2017 proposal proposes further IMF work on social protection, continuing IMF recent reforms to social security, welfare and labour systems. Austerity or fiscal consolidation reforms are very unpopular as they have detrimental impacts on populations. In several European countries, national Constitutional Courts found IMF-supported…

International Finance Governance Undemocratic Jomo Kwame Sundaram

Why is it so difficult to achieve meaningful coordination when everybody agrees that it is desirable, if not necessary? President Richard Nixon's withdrawal of the US from and hence termination of the Bretton Woods system in 1971 confirmed the end of the post-war Golden Age. This led to slower growth, greater volatility, more instability, and reduced progress in raising economic welfare, among other consequences. Multilateral governance compromised The Bretton Woods institutions (BWIs) -- World Bank and International Monetary Fund (IMF) -- were initially conceived as part of a post-war system of multilateral governance to ensure the conditions for peace, growth,…

Privatization Cure Often Worse Than Malady Jomo Kwame Sundaram and Anis Chowdhury

Privatization of SOEs has been a cornerstone of the neo-liberal counterrevolution that swept the world from the 1980s following the economic crisis brought about by US Fed's sharp hike in interest rates. Developing countries, seeking aid from the International Monetary Fund (IMF) and the World Bank, often had to commit to privatization as a condition for credit support. The World Bank and the IMF then attributed developing countries' inability to adjust to the external shocks of that time, inter alia, to their import-substituting industrial policy initiatives and the inefficiency of the state-owned enterprises (SOEs). Hence, their support came with conditions…

The IMF Needs to Change, Whoever Becomes its Next Chief Jayati Ghosh

European governments have quickly rallied around the candidacy of Christine Lagarde, finance minister of France, for the top job at the IMF. For obvious reasons, this is not popular in the capital cities of major developing countries playing a more important role on the world stage. For more than 60 years now convention, rather than any written rules, has dictated that the appointment of heads of the Bretton Woods institutions has been controlled by the traditional global powers. The US has provided the chief of the World Bank and Europe has provided the head of the IMF. These "conventions" emerged…

Reforming the International Monetary Fund – Why its legitimacy is at stake Hector R. Torres

This paper critiques the IMF’s capacity to influence its key members’ policies through its advice, and to give confidence to potential borrowers by offering opportune and meaningful financial assistance in case of trouble. It argues that IMF’s governance structure is inconsistent with its multilateral nature and is dysfunctional to its purposes. There is also an ideological bias in its policy advice that prevents the Fund from being responsive to citizens’ concerns and challenges posed by globalization. The ongoing reform process is tinkering on the margins and if not redressed will fail to bring additional credibility and effectiveness to the Fund.…

Increasing Poverty in a Globalised World: Marshall plans and morgenthau plans as mechanisms of polarisation of world incomes Erik S. Reinert

The increasingly globalised economy seems to produce opposite effects of what standard economic theory predicts. Instead of a convergence of world income (towards factor-price equalisation), a group of rich nations show a tendency to converge, another convergence group of poor countries gathers at the bottom of the scale. This paper explains the mechanisms and the economic policies that create this type of gap in the living standard of workers in the non-tradable service sector. globalised_world (Download the full text in PDF format)

Third World Water Forum: An agenda for public (risk) and private (profit) partnership!!! Mohan G Francis

The Third World Water Forum was held in the three neighboring Japanese cities of Kyoto, Shiga and Osaka from March 16th to the 23rd, on various interlocking themes dealing with water, especially on how to bring safe water and sanitation to the entire world. Some 24,000 participants from 182 countries attended the sessions. "The key issues addressed revolved around balancing increasing human requirements for adequate water supplies and improved health and sanitation with food production, transportation, energy and environmental needs. The forum in its conclusion while drawing up more than 100 new commitments felt that most countries would require more…

The Brazilian Swindle and the Larger International Monetary Problem James K. Galbraith

The postwar liberal trading framework has become hopelessly distorted during the past two decades by the hegemony of the U.S. dollar, high interest rates, debt deflation, and capital flight; the asymmetries of a world so structured are proving intolerable. The economist John Maynard Keynes recognized this issue with characteristic clarity in the design of the Bretton Woods institutions--the World Bank and International Monetary Fund--in 1944. Keynes favored free markets and liberal trading arrangements insofar as they could be made to work, but he was also well aware that free markets are inherently unstable and prone to collapse. Keynes also understood…

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