Abstract:

Increasing IMF quotas (or changing their distribution) requires the approval of the United States, which maintains enough votes at the IMF to block such decisions. Any change in the US quota, in turn, must be approved by the US Congress—a feature of US law which gives Congress a central role in quota determination. In this paper, I analyse congressional votes on legislation to increase the US quota subscription to the IMF. I argue that legislators are more likely to support a quota increase (1) the more ‘liberal’ their ideology, (2) the larger the share of high-skilled ‘pro-globalization’ voters residing in their districts and (3) the larger the share of campaign contributions they get from banks that specialize in international lending. Statistical tests of congressional voting on requests for quota increases in 1983 and 1998 support these arguments.

Introduction

The United States is positioned at the International Monetary Fund (IMF or Fund) to unilaterally veto changes in the size or distribution of ‘quotas’. This is because altering quotas requires an 85 per cent majority in the IMF's Board of Governors, and the United States has never held less than 17 per cent of the votes. No matter how intensely other members feel about the need for increasing or redistributing quotas, opposition by the United States alone can block any quota adjustment. On quotas, the United States is predominant.