- Michael Mussa, and Paul Masson
- Published Date:
- December 1996
Pamphlet Series No. 50
The Role of the IMF
Financing and Its Interactions with Adjustment and Surveillance
Paul R. Masson and Michael Mussa
INTERNATIONAL MONETARY FUND
Reprinted July 1997
Reprinted September 1999
The opinions expressed in the pamphlet are those of the authors and should not be attributed to the Executive Directors of the International Monetary Fund or their national authorities.
The term “country,” as used in this pamphlet, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.
- The Changing International Environment
- The Rationale for IMF Financing
- Lessons from Mexico for IMF Surveillance and Financing
- Implications for the Future Need for IMF Resources
- 1. Ratios of Nongold Reserves to Imports of Goods and Services
- 2. Selected Corrections of Large Current Account Deficits and Associated Output, Real Exchange Rate, and Reserve Changes
- 3. Selected Industrial and Middle-Income Developing Countries: Monthly Changes in Gross Reserves (1985–93) Relative to IMF Quota
- 4. Net External Financing Flows to Developing Countries and Economies in Transition
- 5. Correlation of Returns on Selected Latin American Brady Bonds with Returns on Mexican Brady Bonds, January 1993–March 1995
The fiftieth anniversary of the IMF in 1994 has been the occasion for a number of conferences and related studies that have considered how the institution may evolve in the future. Moreover, changes to the international economic environment related to enhanced financial market integration and vastly expanded capital flows have prompted calls from many quarters for a systematic reassessment of the financing role of the IMF. The desirability of such a study has been heightened by recent events, including most notably the European exchange rate crises of 1992–3 and the Mexican economic and financial crisis of 1994–5.
This pamphlet focuses on one aspect of this overall reassessment: the rationale for IMF financial support and the relationship between this support and the surveillance carried out by the IMF in seeking to correct maladjustments of member countries’ balance of payments.
The pamphlet is based on a paper prepared by the authors as part of the response to the Interim Committee’s request for a review by the Executive Board of the role of the IMF. The authors would like to thank Peter Clark, Donald Mathieson, and Steven Symansky of the Research Department for discussion and comments; colleagues in other departments also provided valuable comments on earlier drafts. Claire Adams provided statistical and computational assistance, and Rosalind Oliver typed numerous drafts as well as the final revision of the pamphlet. The pamphlet was edited by Thomas Walter of the External Relations Department.