INTERNATIONAL MONETARY FUND
October 3, 2009
1. Background. This paper responds to the request in the last IMFC communiqué for the Executive Board to report on governance reform. Preliminary Board discussions have yielded agreement in some areas, but the topic is complex, and it should be stressed that more work is needed to refine proposals and garner broad consensus (see http://www.imf.org/external/np/sec/pn/2009/pn0998.htm). In drafting this report, a range of external inputs have also been considered, including from the Trevor Manuel Group, the Independent Evaluation Office, academics/think tanks, and civil society.
2. Motivation. The current crisis has shown that the Fund’s decision-making structures can deliver the kind of innovative and rapid responses the membership needs and expects. Even so, there is an undercurrent of doubt about the future, reflecting the perception that much of the recent responsiveness has been driven by outside forces (e.g., the G-20) and that, once the crisis fades, old dissatisfactions with vote, voice and process will resurface to undermine the political backing that has been key to the Fund’s renewal. Hence, the IMFC’s interest in reforms to underpin the institution’s legitimacy and effectiveness is important and timely. This report focuses on five areas: fair quota share; high-level engagement; effective decision-making and representation at the Executive Board; open selection of management (and, more broadly, staff diversity); and updating of the Fund’s mandate.