Evans and Finnemore: Organizational Reform and the Expansion of the South's Voice at the Fund

Evans, P, M Finnemore, Harvard University. Center for International Development, UNCTAD. Project of Technical Support to the Intergovernmental Group of Twenty-four on International Monetary Affairs and Development, and UNCTAD. 2001. Organizational Reform and the Expansion of the South's Voice at the Fund. United Nations.

"In this paper we argue that a variety of organizational changes are both feasible and could substantially increase the ability of developing countries to articulate policy alternatives and advance change. We focus particularly on changes in the recruitment, training, career paths and deployment of the Fund's staff. Our recommendations address two general issues. First, we explore ways to diversity the 'intellectual portfolio' of the staff by drawing more effectively on hands-on knowledge of the concrete circumstances that shape policy outcomes in the South....Second, large asymmetries in workload currently make it difficult for those working on the needs of developing members to formulate and advocate alternative policies. We suggest a number of ways in which even modest reallocation and addition of staff resources might create breathing space that would allow Executive Directors from developing countries to play a larger role in shaping the Fund's policies" (from abstract).

The first suggestion requires a substantive restructuring of the Fund's organization. The second is perhaps a simpler fix. Both of these fixes requires political capital to be spent.

The authors argue that The Fund should represent a unique source of global human capital, as it is comprised of hundreds of the best economists in the world. However, this is not how The Fund is seen by policy makers who are compelled to work within its constraints. This can be reconciled with a more granular approach to assessing different fund prescriptions that relies on local knowledge and resources.

The Fund is also not governed according to the principle of one state, one vote. Instead, voting takes place based on the amount of money that countries have given to Fund reserves. This is then exacerbated by the amount of consensus needed to reach agreements: a full 85%. With a voting bloc that is larger than 15%, the US effectively wields a veto hammer for all Fund decisions.

The degree of professional homogeneity at the Fund is also remarkable: almost all of its staff are Western trained macro-economists.