A Bigger, Bolder Role Is Imagined For the IMF

Established in 1944 at the Bretton Woods Conference, the IMF's role in the global economy has historically been advisory. Now, however, the leaders of the G20 have expressed their commitment to completely upgrading and altering the role of this international institution. In its new capacity, the IMF will act as a global watchdog for the economy as well as a sort of financial UN. Economic diplomats from countries on the advisory council will meet to discuss how best to aid the global economy.

I find this proposed change in the structure and power of the IMF extremely interesting. Currently, the organization is often criticized for imposing too-strict limits on the countries it lends money to. Under this new regime it will lower its restrictions for lending. It will not, however, carry any weight for enforcing its decisions; it will not even have the sanction power that the UN has. I think increasing the role of the IMF in the global economy is a good idea in theory. In practice, however, we have seen that advisory councils with no enforcement power, such as the UN, have become largely irrelevant. I'm not sure how the leaders of the G20 will be able to shape the IMF so that it does not become another inconsequential international institution.