IMF and Developing Countries

International Monetary Fund

International Monetary Fund (IMF), specialized agency of the United Nations, established in 1945. It was planned at the Bretton Woods Conference (1944), and its headquarters are in Washington, D.C. There is close collaboration between it and the International Bank for Reconstruction and Development. Its primary mission is to ensure stability in the international monetary system. The IMF provides policy advice and financing to member countries with economic problems. The organization, using a fund subscribed by the member nations, purchases foreign currencies on application from its members so as to discharge international indebtedness and stabilize exchange rates. The IMF currency reserve units are called Special Drawing Rights (SDRs); from 1974 to 1980 the value of SDRs was based on the currencies of 16 leading trading nations. Since 1980 it has been reevaluated every five years and based on the relative international economic importance of the British pound sterling, the European Union euro (formerly the French franc and German mark), the Japanese yen, and the U.S. dollar. To facilitate international trade and reduce inequities in exchange, the fund has limited power to set the par value of currencies. Members are provided with technical assistance in making monetary transactions.

In 1995 the fund moved to increase disclosure requirements of countries borrowing money and at the same time created an emergency bailout fund for countries in financial crisis. IMF was criticized in 1998 for exacerbating the Asian financial crisis, through the fund's decision to require Asian nations to raise their interest rates to record levels. During the international financial crisis of the early 21st cent., the IMF provided loans and access to credit of more than $100 billion to developing countries that were affected by falling demand for their exports and other financial problems. IMF support and financing was also critical to financial rescue plans for several European Union members in the early 2010s. The fund is ruled by a board of governors, with one representative from each nation. The board of governors elects an executive board of 24 representatives to direct regular operations; the executive board selects and is chaired by the managing director, who also heads the IMF's staff. There are 188 members in the IMF.

See studies by H. G. Grubel (1970), T. Agmon et al., ed. (1984); R. D. Hormats (1987), T. Ferguson (1988), E. P. McLellan, ed. (2002), D. Vines and C. L. Gilbert, ed. (2004), E. M. Truman, ed. (2006), and G. Bird (2003) and as ed. with D. Rowlands (2 vol., 2007).

The Columbia Encyclopedia, 6th ed. Copyright© 2013, The Columbia University Press.

Selected full-text books and articles on this topic

Crisis of Credibility: The Declining Power of the International Monetary Fund
Bello, Walden; Guttal, Shalmali.
Multinational Monitor, Vol. 26, No. 7-8, July-August 2005
World Bank and IMF Destroying Third World Agriculture
Bello, Walden.
CCPA Monitor, Vol. 15, No. 3, July/August 2008
Pathways through Financial Crisis: Argentina
Setser, Brad; Gelpern, Anna.
Global Governance, Vol. 12, No. 4, October-December 2006
A More Inclusive Global Governance? the IMF and Civil Society in Africa
Scholte, Jan Aart.
Global Governance, Vol. 18, No. 2, April-June 2012
Accountability of the International Monetary Fund
Barry Carin; Angela Wood.
IDRC, 2005
Russia and the IMF: A Sordid Tale of Moral Hazard
Hedlund, Stefan.
Demokratizatsiya, Vol. 9, No. 1, Winter 2001
The Politics of Lending and Reform: The International Monetary Fund and the Nation of Egypt
Chase, Alison Elizabeth.
Stanford Journal of International Law, Vol. 42, No. 2, Summer 2006
A WRITER AT LARGE: Hypocrisy and the IMF ; the International Monetary Fund Believes in Free Market Capitalism - but Only for the Developing World, Not for Rich Countries. Joseph Stiglitz, Former World Bank Vice-President and Nobel Laureate, Explains to JOHANN HARI Its Intellectual Incoherence and Moral Bankruptcy
Hari, Johann.
The Independent on Sunday (London, England), November 9, 2003
Lending Credibility: The International Monetary Fund and the Post-Communist Transition
Randall W. Stone.
Princeton University Press, 2002
IMF-World Bank and Labor's Burdens in Africa: Ghana's Experience
Kwamina Panford.
Praeger, 2001
A Retrospective on the Mexican Bailout
Vasquez, Ian.
The Cato Journal, Vol. 21, No. 3, Winter 2002
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