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6/5/2005
The Globalizers in Search of a Future: Four reasons why the IMF and World Bank must change, and four ways they can
Ngaire Woods
April 2006
Abstract
The IMF and the World Bank have been effective engines of globalization. They employ the largest number of applied economists of any institution in the world, aggregating an awe-inspiring bank of economic data and applied research. Their data, standard-setting role, and global influence are prized by their wealthiest members. Poor countries borrow from them. In a globalizing world, we particularly need such institutions. So why are they now in decline?
Both institutions are under serious attack. It is no longer just radicals who accuse the institutions of “peddling poor quality economic advice,” serving American interests, supporting or even promoting corrupt and oppressive regimes, and hurting the poor. Sir Edward Clay, Britain's former High Commissioner to Kenya recently accused the Bank of “feeding the pig of corruption.” The Governor of the Bank of England argued in February 2006 that the IMF has “lost its way,” and is joined in arguments for reform of the IMF by US Treasury official Tim Adams, as well as twenty Finance Ministers from the largest economies in the world meeting as the G20 Finance Ministers.1 From several sides, the IMF and World Bank are being assailed for lacking legitimacy, independence, and effectiveness.
