New Book Weighs IMF Response to a Crisis-Filled Decade

Events of the 1990s transformed IMF’s role

Globalization, transparency were game-changers

Decade's history holds valuable lessons for the institution

Following the fall of the Berlin Wall, the world witnessed the collapse of the Soviet Union and the difficult transition of former Eastern bloc countries to market economies. Beginning with Mexico in 1994, a series of crippling financial crises spread across the globe. China, India, and many other countries took giant steps out of poverty, while others struggled to keep up.

For the IMF, these events presented challenges that took the international financial institution into uncharted territory and transformed its role.

The latest volume of the IMF’s official history, Tearing Down Walls: The International Monetary Fund, 1990-1999, provides a unique, insightful look at how the institution responded to the events of that decade.

From secrecy to openness

Basing his account on a wide range of interviews, documents from the IMF’s archives, and scholarly research, IMF historian James Boughton analyzes the inner workings of the institution during the 1990s in the context of political, social, and intellectual developments of the world at large.

The title Tearing Down Walls refers to the destruction of barriers at many levels—the fall of the Berlin Wall and all that it symbolized; the process of globalization in which economic and financial walls between countries disappeared; and the IMF’s own effort to become more transparent and remove barriers that had made it seem mysterious to much of the world.

The IMF’s cultural shift from secrecy to openness is a key theme of the book. Boughton describes the rapid unfolding of the Mexican crisis in 1994 and how IMF economists realized they did not have enough data in real time to keep pace with what was happening. This realization led to some soul-searching at the IMF, and ultimately resulted in greater transparency on the part of both the institution and its member countries.

The book contains many other vivid descriptions of what went on...