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The International Monetary Fund in the 1990s

Published online by Cambridge University Press:  28 March 2014

A. D. Crockett
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Extract

WHEN ITS ARTICLES OF AGREEMENT WERE DRAWN UP IN 1944, the International Monetary Fund was seen as having two main functions: to oversee the operation of a system of fixed, but adjustable, exchange rates; and to promote the removal of payments restrictions on international trade. Over the years since then, despite the demise of the fixed exchange rate system and a steady decline in payments restrictions, the scope of the Fund's influence has grown. Why should this be?

In broad terms, the answer is to be found in the increasing integration of the world economy. As trade and investment flows have grown, so too have the concerns of the international community for good economic management in individual national economies. ‘Spill-over’ effects have grown in size and importance, and with them the need for a framework to regulate their consequences.

Type
Articles
Information
Government and Opposition , Volume 27 , Issue 3 , 01 July 1992 , pp. 267 - 282
Copyright
Copyright © Government and Opposition Ltd 1992

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References

1 For example, Alexander, Sidney S., ‘Effects of a Devaluation on a Trade Balance’, IMF Staff Papers, Vol. 2, 04 1952;Google Scholar Polak, J. J., An International Economic System, Allen & Unwin, 1954;Google Scholar J. Marcus Fleming, ‘Domestic financial policies under fixed and floating exchange rates’ in Cooper (ed.), International Finance Selected Readings, 1969; and Mundell, R. A., ‘The Appropriate Use of Monetary and Fiscal Policy’, IMF Staff Paper, 03 1962;Google Scholar also ‘The Monetary Approach to the Balance of Payments’, collection of research papers by members of Fund staff, 1977.

2 However, see John Williamson, ‘International Liquidity—a Survey’, Economic Journal, September 1973, for a comprehensive review.

3 The five members with the largest quotas have an automatic right to an appointed director, as do the two largest creditors of the Fund, if they are not among the five largest quotas (Saudi Arabia fell in this category). Among the elected directors, one represented a ‘single‐member’ constituency (China).

4 ‘A Study of the Soviet Economy’, a joint study by the IMF, World Bank, OECD and EBRD, published by the OECD in February 1991.

5 Decision No. 5392 (77–63), 29 April 1977, Selected Decisions the International Monetary Fund, Sixteenth issue, May 1991.

6 The Members of the Group of Seven are the United States, Japan, Canada, France, Germany, Italy and the United Kingdom.