Arnold Kling  

End the IMF?

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No, this is not Ron Paul who writes,


The IMF's business model sabotages properly functioning capitalism, victimizing ordinary people while benefiting the elites. Do we need international agencies to enable irresponsible--verging on immoral--borrowing and lending? Instead of dreaming up too-clever-by-half schemes to stumble through crises after they happen, why not just stop imprudent banks from accommodating foreign borrowing by feckless governments?

That is Amar Bhide and Edmund Phelps.

On the one hand, when Bretton Woods collapsed, the IMF's reason for being disappeared. On the other hand, it is an international agency staffed by elite policy experts, so it must be doing good and important work, right?



COMMENTS (5 to date)
Nick Rowe writes:

Has the IMF made a profit (on average, over the years)?

If so, unless it was being subsidised, that suggests it might be a good thing.

mick writes:

If only we had economic officials who were actually elite, that is, their skill was superior.

Joe in Morgantown writes:

Nick,

making a profit is not sufficient considering the IMF's reason for existence is its externalities. If those externalities are not positive, the enterprise is not a success.

Even from the balance sheet view, it is important not to neglect the opportunity costs of funding the IMF.

chipotle writes:

[Ad hominem comment removed.--Econlib Ed.]

Anon. writes:
Instead of dreaming up too-clever-by-half schemes to stumble through crises after they happen, why not just stop imprudent banks from accommodating foreign borrowing by feckless governments?

This assumes that you can identify feckless governments. When they are opaque and official statistics are manipulated, how do you do it?

It wasn't in banks' interests to lend to Greece, but they did it anyway because they didn't know better. Why would some regulator be better informed than the people with actual money on the line?

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