ABSTRACT
The emergence of the 'dollar overhang' in the early 1960s and the continuation of the American deficit focused attention on the inherently unstable nature of the existing monetary structures and initiated a search for alternatives. The debate over the future role of the International Monetary Fund (IMF) at Bretton Woods was resolved in favour of a solution which gave it limited powers of short-term intervention on the basis of resources allocated to it by its members. The World Bank produces general country level analyses of economic policies and performances which presumably inform its overall assessment of creditworthiness. While the size of surplus country quotas determines the level of potential IMF lending, that of deficit countries determines their capacity to borrow. The general arrangements to borrow must be treated as a highly contradictory response to the emerging liquidity problem which essentially consolidated the dominance of the position occupied by the leading industrial countries.
