Chapter

CHAPTER 6 Efficiency and Legitimacy: Trade-Offs in IMF Governance

Author(s):
Alessandro Rebucci, and Ashoka Mody
Published Date:
April 2006
    Share
    • ShareShare
    Show Summary Details
    Author(s)
    Carlo Cottarelli1

    Designing appropriate governance structures for an international financial institution such as the IMF is difficult, because steps to enhance the legitimacy of such an institution through constraints on its decision-making process may affect its operational efficiency. Potential trade-offs between legitimacy and efficiency exist for any public institution but are arguably more severe for an international one, because delegating power to it is politically controversial and, thus, likely to imply tighter constraints. The paper also underscores that the trade-offs are not absolute, however: they depend on the specific ways in which legitimacy is pursued—that is, on the specific constraints that are set. Strategic reforms should, thus, aim at improving the terms of the trade-off by exploring steps that are Pareto-improving in the dimensions of legitimacy and efficiency.

      You are not logged in and do not have access to this content. Please login or, to subscribe to IMF eLibrary, please click here

      Other Resources Citing This Publication