Table Of ContentReforming the Governance
of the IMF and the World Bank
Advance Reviews
‘The U.S.cannot afford a diminished IMF and World Bank.Nor can the rest
of the world. It should lead not resist the restructuring of voice and votes
that would secure their legitimacy and effectiveness for a new century. Here
are the reasoned arguments why – and some politically practical ideas how.
This book deserves wide attention. I hope it inspires thoughtful debate – not
just among international financial insiders in the world’s capitals, but on
Capitol Hill and Wall Street and their European counterparts, and in the
university and business school classrooms of China, India, South Africa,
Brazil and beyond.’
Nancy Birdsall
President of the Center for Global Development,Washington D.C.
‘Raising the voice and vote of the developing countries in decision making in
the IMF and the World Bank will strengthen their governance and legitimacy.
The essays by the experts in this volume clarify the positions of developing
countries. They constitute an invitation to experts in the industrial countries
and the European union to further enrich this debate.’
Leo van Houtven
Former Secretary and Counsellor,IMF
‘The construction of more legitimate arrangements in the IMF and the World
Bank is one of the principal challenges for effective global economic governance
today.This book looks beyond long-standing deadlocks on issues of represen-
tation and accountability with innovative and feasible proposals for positive
reform.’
Professor Jan Aart Scholte
Professor in Politics and International Studies,and currently Co-Director of the ESRC/
Warwick Centre for the Study of Globalisation and Regionalisation
‘You know something is seriously amiss in global economic governance when
Belgium, Sweden and Switzerland, with 0.004% of world population and
12% of world GDP, have the same share of IMF and World Bank votes as
China and India, with 38% of world population and 19% of world GDP;
and when the former do not even borrow from the organizations. This book
contributes to the wider process in which the developed countries are slowly
being hoist by their own petard: having enjoined the IMF and the Bank to
press for governance changes in borrowing countries,borrowing countries are
now pressing for the same criteria to be applied to international organizations.
The essays provide hard ammunition for the debate about what exactly should
be done.’
Robert Hunter Wade
Professor of Political Economy,Development Studies Institute,LSE
This timely volume directs attention to the unreformed governance structures
of the twin organizations [the IMF and the World Bank] reflected among
other things by the way they still select their leaders,and by their unbalanced
voting procedures. If they are to regain credibility and reinforce the right to
prescribe governance reforms to member states the IMF and the World Bank
need to set an example of transparency and improved functionality by reform-
ing themselves.This volume contains the latest work of the Technical Group
of the G24 aimed at assisting that process.’
Laurence Whitehead
Official Fellow in Politics,Nuffield College,Oxford
Reforming the Governance
of the IMF and the World Bank
Edited by
ARIEL BUIRA
for the G-24 Research Program
Anthem Press
Anthem Press
An imprint of Wimbledon Publishing Company
www.anthempress.com
This edition first published in UK and USA 2005
by ANTHEM PRESS
75–76 Blackfriars Road,London SE1 8HA,UK
or PO Box 9779,London SW19 7ZG,UK
and
244 Madison Ave.#116,New York,NY 10016,USA
© 2006 Ariel Buira editorial matter and selection;
individual chapters © individual contributors.
The moral right of the author has been asserted.
All rights reserved.Without limiting the rights under copyright reserved above,
no part of this publication may be reproduced,stored or introduced
into a retrieval system,or transmitted,in any form or by any means
(electronic,mechanical,photocopying,recording or otherwise),
without the prior written permission of both the copyright
owner and the above publisher of this book.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging in Publication Data
A catalog record for this book has been requested.
1 3 5 7 9 10 8 6 4 2
ISBN 978 1 84331 211 6 (Pbk)
CONTENTS
List of Contributors xi
Foreword xv
1. Introduction 1
2. The Bretton Woods Institutions:Governance without Legitimacy? 7
Ariel Buira
3. Reforming the International Monetary Fund:Towards Enhanced
Accountability and Legitimacy 45
Vijay L.Kelkar,Praveen K.Chaudhry,Marta Vanduzer-Snow and V.Bhaskar
4. Improving IMF Governance and Increasing the Influence of
Developing Countries in IMF Decision-Making 75
Murilo Portugal
5. Issues on IMF Governance and Representation:An Evaluation
of Alternative Options 107
Guillermo Le Fort V
6. Making the IMF and the World Bank More Accountable 149
Ngaire Woods
7. Purchasing Power Parities and Comparisons of GDP in IMF
Quota Calculations 171
John B.McLenaghan
8. Measuring Vulnerability:Capital Flows Volatility
in the Quota Formula 195
Laura dos Reis
9. Enhancing the Voice of Developing Countries in
The World Bank:Selective Double Majority Voting
and a Pilot Phase Approach 213
Cord Jakobeit
viii CONTENTS
10. Voting Power Implications of a Double Majority Voting
Procedure in the IMF’s Executive Board 235
Jonathan R.Strand and David P.Rapkin
11. Power versus Weight in IMF Governance:The Possible
Beneficial Implications of a United European Bloc Vote 251
Dennis Leech and Robert Leech
12. Changing IMF Quotas:The Role of the United States Congress 283
J.Lawrence Broz
The G-24
The Intergovernmental Group of 24 for Intentional Monetary Affairs and
Development was constituted in 1972 as a result of a mandate given in Lima
by the Group of 77 to their Chairman, to consult member governments on
the establishment of an intergovernmental group on monetary issues. Its
members, nine African, eight Latin American and seven Asian countries are
as follows:
Algeria,Argentina,Brazil,Colombia,Côte d’Ivoire,Democratic Republic of
Congo, Egypt, Ethiopia, Gabon, Ghana, Guatemala, India, Iran, Lebanon,
Mexico,Nigeria,Pakistan,Peru,Philippines,South Africa,Sri Lanka,Syrian
Arab Republic,Trinidad and Tobago,and Venezuela.
The purpose of the G-24 is to further the interests of the developing coun-
tries and their effective participation in the discussions of monetary,financial
and development issues at the Bretton Woods institutions and other fora. It
seeks to provide technical support to its members and to the G77 in their con-
sideration of these issues.To this effect,the G-24 Secretariat,supported by its
members and other sources,runs a research programme in which academics
and other researchers from countries in the North and South address
the main issues of concern to the developing world in their areas of compe-
tence. To ensure intellectual freedom in their work, the results of their
research and the views expressed in the papers presented to the G-24 are the
sole responsibility of the authors.
