The IMF and the force of History: Ten Events and Ten Ideas that Have Shaped the Institution

Abstract

This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The International Monetary Fund was designed during World War II by men whose worldview had been shaped by the Great War and the Great Depression. Their views on how the postwar international monetary system should function were also shaped by their economics training and their nationalities. After the IMF began functioning as an institution, its evolution was similarly driven by a combination of political events (Suez, African independence, the collapse of global communism), economic events (the rising economic power of Europe, the Middle East, and Asia), and trends and cycles in economic theory (the monetary approach to the balance of payments, new classical economics, the rise and fall of the Washington Consensus). As they happened, these forces had effects that were perceived as adaptations to current events and new ideas within a fixed institutional structure and mandate. The cumulative effect of history on the institution has been rather more profound and requires a longer and larger perspective. JEL Classification Numbers: F33, N20, and O19

How Does International Trade Regulation Addresses Exchange Rates Measures?

“…It is fair to argue that, due to the deep transformation of the Fund's role in the international economic governance structure after the end of the dollar-gold standard in the 1970s and 1980s (BOUGHTON, 2001), especially regarding the possibility of members choosing the "exchange arrangements of their choice" and the surveillance system in place, it is very unlikely that the IMF would recognize a country as in violation of its Article IV due to currency manipulation.…”

BRICS at the Gate: Modern International Monetary System in Conditions of Balanced Uncertainty

“…The Tripartite Agreement of 1936 between the U.S., France and Great Britain which traded mutual exchange rate stability for trade openness, and also helped in the process exorcise some of the bitter memories of the 1922 Genoa Conference, was envisaged as a useful prototype for international monetary cooperation, going forward (Boughton, 2004;Frieden, 2006). Unfortunately from the get-go, however, the standing of the IMF was neutered by the U.S. Treasury Department such that it would only assume an emergent role from the 1960s onwards -and mostly with regard to economic emergencies in countries at the periphery of the monetary system.…”

Explaining IMF lending decisions after the Cold War

“…International trade in goods, services and especially capital was limited as a consequence of the Great Depression and World War II. While one of the main objectives of the Fund has remained to help governments overcome temporary balance of payments problems, its role in the world economy has changed remarkably due to historical events of economic and political nature (see for instance Boughton, 2004). There have been different epochs in the history of the IMF, but -at least -two structural changes during the last 20 years are worth mentioning that initiated the latest era.…”