• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The role of the International Monetary Fund

Extracts from this document...


Some of the questions that I will be focusing on include: What do the reforms include? What are the problems the reforms are designed to solve? Will they succeed? What are the obstacles to reform? The IMF was created in 1944 as an organization to promote international monetary cooperation through exchange rate stability and to facilitate the expansion of international trade by addressing balance of payment problems among the initial twenty nine member countries. In recent decades the IMF members have grown significantly. From its first twenty nine members, to now one hundred and eighty three members are now apart of the IMF. Form its original mandate in 1944- to coordinate national currencies- the IMF mandates has significantly expanded. Now the IMF offers financial support and credit to countries in need of financial assistance. The IMF provides fiscal and monetary advice to governments and local economies. In recent years the IMF has received backlash for its policies. Some have argued that the IMF policies and the conditions that the IMF attaches to its loans do more damage than good. ...read more.


People also claim that the IMF is generally apathetic or hostile to their views of democracy, human rights, and labor rights (Lee, 2002). These criticisms generated a controversy that helped spark the anti-globalization movement. Others claim the IMF has little power to democratize sovereign states, nor is that its stated objective: to advise and promote financial stability. Arguments in favor of the IMF say that economic stability is a precursor to democracy (Cowley, 2000). Two criticisms from economists have been that financial aid is always bound to conditionalities, including Structural Adjustment Programs. Some say that conditionalities retard social stability and hence inhibit the stated goals of the IMF. Some people disagree with the IMF because the IMF frequently supports currency devaluation, which is criticized as inflationary. Also, the IMF puts higher taxes under austerity programs with economic reduction (Danaher, 2001). Currency devaluation is recommended by the IMF to the governments of poor nations with struggling economies. Some economists claim these IMF policies are destructive to economic prosperity, although many other economists disagree. ...read more.


in what came to be known as the Goldenberg scandal, leaving the country in a state worse than that which it was in before the IMF reforms were implemented. The IMF intervenes only in countries that experience years of bad economic conditions. This has certainly hurt its reputation. The economic collapses tend to lead to years of economic difficulty that can be addressed in various ways. IMF Stuctural Adjustment Policies consistently serve to open up or liberalize economies to foreign capital rather than provide for economic recovery through statist policies such as government financed projects to achieve full employment. Thus, IMF policies further the notion that economic development in developing countries is dependent on attracting foreign investment instead of through a state-managed approach centered on full employment and progressive taxation. Overall the IMF success record is limited. While it was created to help stabilize the global economy, since 1980 over 100 countries have experienced a banking collapse that reduced their GDP. The considerable delay in IMF response to a crisis, and the fact that it tends to only respond to problems rather than prevent them, has led many people to argue for reform. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree International Politics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree International Politics essays

  1. What is Globalization?

    United Nations data shows that in the latter half of the 1980s, nearly 80 percent of all FDI inflows were directed to developed countries. In fact, past activity of the MNC shows that there has been little shift to globalize global corporations.

  2. What caused the Financial Crisis: An in-depth study of Neoliberalism and the Lehman Brothers

    The reasons behind this were simple, as aforementioned, the Lehman Brothers had the belief that they were "too big to fail" (Dewatripont, Rochet & Tirole 2010 p5, Duffie 2011 p5, Alexander 2009 p81). This means that they thought the trillions of dollars which were invested in the bank would be

  1. What role do Human Rights play in International politics today?

    of global citizens".19 There is no doubt that globalization has led to a renewed interest in alternative forms of a political world order and there also lies a powerful argument in favour of cosmopolitan democracy which hopes of a more stable international community and the upholding of public law20.

  2. Should the United States Get Involved with Problems in the Middle East?

    These are some of the main myths about that war: The attack was like Pearl Harbor, and therefore, as in the Second World War, we had to declare war or risk destruction. The truth is that Pearl Harbor was an attack by a powerful, expansionist state that had the capacity to subjugate all of East Asia.

  1. The impostion of Structural Adjustment Programmes on sovereign African states is a form of ...

    It became heavily involved in Africa towards the end of the 1970s, mainly as a response to the increasing likelihood of many states in Africa not being able to meet their heavy debt requirements. The structure of the international financial and trading economy came under strain and the IMF began

  2. Machiavelli and the Stability of the State.

    A well-rounded or cultured ruler is irrelevant. The role of power and the responsibilities of the ruler are justified with stability as an end. The ruler's power is not a means to end in itself. Machiavelli does not essentially promote or encourage violence and cruelty to a ruler's own population, but sees it as necessary at times.

  1. "Forced Labour in Burma: An assessment of procedures and strategies for the international protection ...

    Social and Cultural Rights recognise the right to work and also import some minimum standards for the working conditions. Moreover, articles 7,8 and 9 of the International Covenant on Civil and Political Rights also state that no one shall be kept in slavery or shall be without his consent subject to scientific or medical experimentation.

  2. Why has the Horn of Africa proved to be a region of such exceptional ...

    to fully acquiesce to the pleas for military help from the Ethiopians. The USSR hoped it could settle the war amicably, and induce Somalia, Ethiopia, and South Yemen to join Libya in a Socialist Federation revolving around the Horn of Africa and the Red Sea.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work