ABSTRACT
The connection between the well-functioning or malfunctioning of the international monetary system and the ease or difficulty of the process of development of the less developed countries is remote, and hence is rarely appreciated by those directly concerned with development problems. On the other hand, the notion that the creation of money entails someone getting something for nothing is only too readily grasped, with the consequence that the growing recognition of the need for reform of the present international monetary system has evoked a host of proposals for such reform designed to capture the ‘something for nothing’ as additional development assistance for the less developed countries. This essay seeks to contribute to a deeper understanding of the issues involved in international monetary reform as they bear on the problems of the less developed countries. To this end, Section 2 discusses the general interest of the less developed countries in a properly functioning international monetary system, Section 3 describes the nature of the present problem of international monetary reform, and Section 4 analyses various proposals designed to link international monetary reform with the provision of increased development assistance to the less developed countries. Section 5 presents a critical evaluation of the most far-reaching of such proposals, the Hart-Kaldor-Tinbergen proposal for an international commodity reserve currency; the amount of space devoted to this scheme is accounted for by the professional eminence of its proponents and the publicity the plan has attracted, and not by any likelihood of its being adopted.
