The IMF is an organisation of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world
- The IMF provides policy advice and financing to its members when they are suffering economic difficulties. Its managing director has always been European. Financial assistance can come in the form of conditional loans or training
- The IMF has a lending capacity of $750bn, funded mainly by the EU, USA, Japan and China
- Developing /emerging market countries argue that the IMF requires substantial reform given the changing balance of power in the world economy. For example, the Brics countries possess just 11% of the votes in the IMF, despite accounting for more than 20% of global economic activity
Does the IMF have a particular view about what constitutes sound economic policies?
- For many years the IMF preached a brand of neo-liberal economic orthodoxy when assessing macroeconomic policies of member nations
- This orthodoxy was built on a belief in balanced budgets and active use of monetary policy to control inflation and inflation expectations. They also favour structural reforms to increase the role of markets in the allocation of resources.
- There are signs of important changes within the economics department of the IMF. Some of their senior economists such as Oliver Blanchard have questioned the economic risks of fiscal austerity measures in countries such as the UK and also in the crisis-riddled single currency area.
