Reform of the International Institutions

Reform of the International Institutions

The IMF, World Bank and the WTO

Peter Coffey and Robert J. Riley

The seemingly endless problems encountered by the IMF, WTO and World Bank provide major reasons for seeking reform. However, an additional impetus is the changing balance of economic power in the world. The volume begins with an overview of the Bretton Woods and international trading systems. Following this are discrete, in-depth discussions of the three institutions from American and European points of view. The authors emphasise the need for making the IMF and World Bank more regional in structure and, like the European Bank, more frugal in the lifestyles of their officials. Similarly, they call for a narrower focus in the mission of the World Bank and the IMF. In the case of the WTO, they call for a democratic reform of the organisation comprising participation by experts and, above all, better representation and support for Third World countries.

Chapter 5: The World Bank

Peter Coffey and Robert J. Riley

Subjects: economics and finance, international economics

Extract

Robert J. Riley INTRODUCTION Much like the IMF, the World Bank has come under close scrutiny over the past several decades, though more intensely so in the 1990s. Again, the criticisms come from across the political spectrum; from within academia, and from outside it. They are directed at both the scope and the particular policies of the Bank’s mission: critics sometimes argue that the Bank does too much, while others claim that it does not do enough. Many believe that it focuses too heavily on market solutions, and others that it fails adequately to account for them. Jessica Einhorn (2001, p. 1), a former managing director at the Bank, writes that: By now, its mission has become so complex as to strain incredulity to portray the Bank as a manageable organisation. The Bank takes on challenges that lie far beyond any institution’s operational capabilities. The calls for greater focus through reform seem to produce little beyond conferences and consternation, since every programme has a dedicated constituency resisting change … whatever the remedy, it is time to redefine the bank’s unwieldy mission. She notes that the Bank has been called on to do much more than its original mission. It has been encouraged to promote development by considering and supporting market-friendly policies, and promoting a long list of ‘economic goods’, including stable economic environments, greater investment in human capital, stronger property rights, better-developed legal systems, promotion of sound and transparent financial markets, and paying greater attention to corporate governance. Einhorn argues that...

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