ABSTRACT
At the end of World War II, the International Monetary Fund (IMF) was created by Western powers as part of the global governance architecture to create economic stability in the international system. The post-war global architecture promoted a development orthodoxy: economic liberalism would lead to economic growth that would then trickle down to poorer segments of society. As global poverty and inequality have continued to grow, however, the wisdom of this development orthodoxy has been repeatedly questioned. As the IMF and the World Bank are at the center of the global governance architecture that continues to defend this mainstream approach to development, their responsibility in furthering and perhaps exacerbating poverty and inequality via their policies has also been pointed out. Moreover, as the IMF and World Bank profess to have the expertise and knowledge to solve poverty and inequality, their role in changing the debate and discourse on how to address and think about this global humanitarian dilemma is important to unpack. The purpose of this chapter is to trace the Fund’s organizational
discourse and resistance to coming to terms with its role in reducing poverty and inequality and to suggest how the Fund can be reformed to better meet the needs of its poorest clients. By examining IMF management studies and speeches as well as IMF staff studies and reports on the issue of poverty and inequality, this chapter processtraces how the internal discourse evolved in reaction to external events and circumstances. By opening up the “black box” of the IMF, this chapter aims to show how the Fund’s internal thinking on these issues changed as Michel Camdessus took the helm and yet in many ways the organizational culture of the Fund shaped internal thinking to keep things “business as usual.” The chapter concludes with an assessment of current proposals to reform the Fund to enable it to be more receptive to the needs of its largest clients: the developing world’s poor.
