Slipping into Obscurity?

Crisis and Reform at the IMF

February 18, 2007

Top policy makers worry today that the International Monetary Fund (IMF) risks "slipping into obscurity." What explains the IMF's declining influence? Two significant developments have been the declining demand for IMF loans from middle-income borrowers, and the emergence of a more critical view towards the institution from US policy makers in recent years. In this new political context, a range of reform proposals has been put forward by Fund management, key shareholders and the concerned policy community, with the goal of restoring and preserving the IMF's significance. Advocates of change have focused particular attention on the need for process-oriented reforms that would change the nature of IMF governance as a means of restoring its legitimacy among many member governments. Also prominent have been more outcome-oriented reforms that propose various changes in IMF activities and performance. A reinvigorated IMF is unlikely to emerge from the current situation without the implementation of governance-related reforms.

About the Authors

CIGI Senior Fellow Bessma Momani has a Ph.D. in political science with a focus on international political economy and is a full professor and associate vice‑president, international at the University of Waterloo.