"The IMF: Victim of Its Own Success or Institutional Failure?"

Many are currently questioning the IMF’s relevance, due to the shrinkage of its loan portfolio and concerns about its legitimacy, especially in Asia . Countries do not want to borrow from the Fund so as not to face the intrusive policy conditionality associated with its lending, and at the same time the absence of crises makes such borrowing unnecessary. While this may be an indication of the IMF’s success in limiting crises, the IMF’s unpopularity stems from mistakes in its policy advice to Asian crisis countries and to Argentina. Two main approaches are being pursued to make the IMF more relevant and legitimate: involve the institution more directly in resolving global imbalances, and reforming IMF quotas to give larger shares to emerging market countries, especially those in Asia . Both approaches have their limitations, and neither promises to allow the Fund to recapture its former prominence, given the continuing expansion of private capital. Defining a more modest role for the IMF that is congruent with such an international monetary system, rather than attempting to expand its activities, seems a more promising way to reestablish its legitimacy and effectiveness.

A light lunch will be provided.