60th anniversary reflections: IMF needs to rethink "the voice and vote" of its members

• Pages: 239-241

Page 239

Over the past decade, Boorman observed, the IMF has continued to evolve in response to a changing world. It has concentrated increasingly on crisis prevention, created new lending facilities and closed down such facilities no longer in demand, transformed itself into an exceptionally transparent institution, changed its staffing and structure, and vastly expanded its well-respected and heavily demanded technical assistance and training activities. At the same time, it has taken on new responsibilities.

The important thing now, Boorman argued, is to build on this record. He focused his remarks and suggestions on three specific areas for further change at the IMF: governance, surveillance, and the institution's role in emerging market countries.

Governance at the IMF

Perhaps the broadest issue concerning governance for the IMF as an institution involves the "voice and vote" of its members, Boorman said. As the world becomes more complex and more closely integrated, there may have to be a different balance within the IMF and other international institutions between the ceding of more sovereignty by nations to the broader international community and applying the principles of subsidiarity. And, he emphasized, whatever sovereignty is ceded by the membership under the IMF's Articles of Agreement, it should not be taken back over time through individual decisions. Major countries, in particular, need to play by the rules and refrain from using political power outside the IMF to force decisions within it. Smaller countries, for their part, need to resist the temptation to be passive when the major countries act this way. Moreover, all members must show renewed commitment to working through consensus.

The failure of voice and vote to keep up with changes in the world economy is reflected in distorted representation at the IMF, Boorman noted, citing, for example, the seven largest Asian countries (other than Japan) having lower aggregate quotas than Austria, Belgium, Denmark, Finland, Norway, Sweden, and Switzerland-despite having seven times the share in global GDP and significantly larger trade. While not making an argument for any particular quota formula, he did suggest that quotas be based primarily on members' participation in trade and financial flows. In the absence of change in this area, Boorman warned, such distortions would tarnish the...