Reform of the International Monetary Fund

"The International Monetary Fund's purpose and scope of work have changed dramatically since its founding after World War II. Whereas at first the Fund aimed to maintain monetary and exchange-rate stability among a mostly industrialized membership, today most members are developing countries, ranging from large, emerging markets to small, impoverished states. The Fund's surveillance of macroeconomic issues has expanded to cover topics with little direct relevance to its mandate. Moreover, though no industrialized country has drawn on the Fund for more than twenty years, such countries still dominate the Fund's decision-making. These developments have sparked calls for reform. Proposals to modify the Fund's activities, lending facilities, and governance have come from many experts, including the Fund's managing director. Others, who find the Fund illegitimate or obsolete, have called for its abolition. This Council Special Report, written by Peter B. Kenen under the auspices of the Council's Maurice R. Greenberg Center for Geoeconomic Studies, rejects the urgings of the abolitionists and goes on to contend that efforts to reform the Fund deserve U.S. support. Many countries remain a