• 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

    supports this essays view that the governments existing regulation was not good enough to prevent the financial crisis, and as such demonstrates that the government should have had tighter control over the markets to prevent, or at the very least reduce, the effects of the financial crisis of 2008.

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

    The fort was bombed and strafed by U.S. planes, even though later reports indicate that perhaps hundreds of the prisoners had their hands bound--this is almost certainly a war crime. At the same time, government officials and media pundits began calling for Osama bin Laden to be killed even if he surrendered.

  2. The International Economy, International Regimes and the Relations of Global Disparities

    So, the question at this point is where exactly does the international political economy (IPE) fit in terms of its effectiveness as a regime? The evolution and characteristics of IPE will be further discussed with the goal of identifying its strong regime characteristics.

  1. Machiavelli and the Stability of the State.

    As opposed to having a worldly ruler with skills in various arts and subjects, Machiavelli's Prince is singular in his scope. Stability is the all important end, and as such, the ruler must ensure that skill sets match this end.

  2. "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.

  1. Did economic growth during the Chinese Economic Reform contribute to human development?

    of capital goods and advanced technology, so the share of mineral and agricultural products gradually decreased to 44% in 1985 and 14.44% in 1995, while the share of capital goods devoted to capital investments and the manufacturing sector climbed from 6.3% to over 30% in two decades (China Total Value of Import and Export).

  2. UN reform

    But the majority of members, still nondemocratic, insisted on simple majority vote." According to these words we can clearly understand that perspectives of reforms are different from each other. All these side giving valuable arguments of their perspectives and to say that one of them giving right perspectives and offers will not be right answer to choose.

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