Making the IMF and World Bank Work for the Poor

The legitimacy of the policies implemented by international financial institutions is being more frequently questioned as can be witnessed by the disturbing conclusions of an internal audit commissioned by the World Bank and published last December: “The World Bank repeatedly trumpeted empirical and preliminary conclusions without recognizing that they were fragile and uncertain”.
While it has saluted the courage and honesty of François Bourguignon, senior vice president and chief economist of the World Bank, WOAgri has also called for profound reform of the Bretton Woods institutions so that they could respond more effectively to the challenges of the 21st century.1
This is also the desire expressed by Jean-Michel Severino, former vice president of the World Bank and current director of the French Agency for Development, in an article entitled “Towards an IMF and World Bank dedicated to the poor”.

The World Bank has long proclaimed its dream of “a world free from poverty.” Likewise, the International Monetary Fund may arguably desire “a world free from financial crisis.” These are crucial and daunting objectives, but they are too narrow for the twenty-first century. To remain relevant, the Bretton Woods institutions must fully adapt to the needs of the world’s rapidly emerging countries, and they can begin that process at this spring’s IMF-World Bank meetings in Washington.

As many now acknowledge, the IMF should look beyond managing financial crises and start addressing non-cooperative economic behaviors – notably in the monetary field. The international community would gain from the IMF’s becoming a center of joint-monitoring and permanent dialogue among the world’s rich, poor and emerging nations. But for that to happen, the latter two need a greater say.

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© Project Syndicate, 2007