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A Checklist of IMF Reforms

© Bryan Johnson

[ Editor's Note: This is the eighth article on the IMF to appear in Political Economy. For previous articles on the IMF, see Bretton Woods Revisited: IMF; Congress Gears Up For IMF Funding Debate; Congress Deals IMF Major Setback; IMF Skepticism Grows in Congress; New IMF Strategy Emerges in Congress; Congress Tackles IMF Tax Subsidy Issue and American Farmers Fall In Love With IMF - Editor - BTJ .]

INTRODUCTION As expected, the U.S. House of Representatives killed a proposal to fully fund the International Monetary Fund on July 15. Instead, the House slashed the $18 billion Clinton Administration's requested to only $3.5 billion. Representative Sonny Callahan, R-Ala., chairman of the Appropriation subcommittee on foreign operations, indicated that the fight over the IMF funding just now is beginning.

The subcommittee agreed to only a $3.5-billion funding for a new line of credit for the IMF, called the "new arrangements to borrow," (NAB). This funding actually is left over from last year's request when it was defeated because it included a controversial amendment to prevent U.S. funds to any international organization that supports abortion.

Now that the subcommittee has marked up its bill, it goes to the full appropriations committee, and then to the House floor for a vote - all of which is expected to happen rather quickly. Meanwhile, the Senate approved the full $18 billion Administration request on March 26, 1998. While the Senate language did express support for some reform, they were minimal and unenforceable. 1 Unlike the Senate, the House seems predisposed to demand that the IMF implement significant, enforceable reform in return for any appropriation.

FUNDAMENTAL REQUIREMENTS

Reform of the IMF has been a periodic concern for Congress. Over the past two decades, over 30 different requirements on IMF activities, IMF reforms, and instructions to the U.S. Executive Director of the IMF on how to use his "voice and vote" have been passed by Congress and signed by the President.2 Opponents of the IMF in the U.S. House of Representative's argue that the legislation has been ineffective because the IMF is not a U.S. government organization and is not obligated to abide by U.S. law. Instead, the U.S. is only a minority voice urging reform from within the IMF. Without a coercive mechanism to force the IMF to adopt desired reforms, opponents argue, reform efforts will not triumph over the bureaucracy and many other countries who benefit from and support the status quo. The extent to which existing legislation, which relies on instructions to the U.S. Executive Director to use his or her "voice and vote" to influence IMF policy, has been effective has been constrained by the Fund's refusal to release its records, documents, and minutes to Congress or the public.

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