{
  "title": "Changing Times: Global Governance Reform and the IMF",
  "publication": "IMF Blog, January 11, 2010",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2010/01/11/global-governance-reform",
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  "overlayPath": "/en/blogs/articles/2010/01/11/global-governance-reform/index.md",
  "summary": "Author: John Lipsky",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Author: John Lipsky\n- Date: January 11, 2010\n- Central premise: The 2008/2009 economic and financial crisis highlighted a shift in relative economic weight toward dynamic emerging market economies, prompting changes in global governance and a stronger role for the G-20 and the IMF."
    },
    {
      "heading": "G-20 Framework for Strong, Sustainable and Balanced Growth",
      "content": "- Findings:\n  - The G-20 adopted a Framework for Strong, Sustainable and Balanced Growth and created a mutual assessment process at the Pittsburgh Summit.\n  - The Framework process aims to preserve unprecedented policy collaboration developed during the crisis and to promote coherent multilateral policy action.\n  - Underpinning belief: expansionary fiscal and monetary measures implemented after September 2008 were critical in arresting and reversing the 2008/2009 global recession.\n- IMF role:\n  - The IMF has been asked to play a key supporting role in the Framework process.\n  - Fund responsibilities include: combining G-20 members’ economic forecasts and policy plans to highlight global prospects and potential challenges; providing analytical support to the G-20 authorities’ examination of likely impacts of potential policy initiatives; and incorporating inputs from other international organizations and institutions into the Framework deliberations.\n- Near-term objective:\n  - Prepare a detailed issues and options report for the November 2010 Leaders’ Summit in Korea."
    },
    {
      "heading": "Multilateral dialogue and past experience",
      "content": "- Historical reference:\n  - In 2006/2007, the IMF convened “Multilateral Consultations on Global Imbalances” with China, the Euro area, Japan, Saudi Arabia, and the United States to develop mutually beneficial economic policies and reduce international payment imbalances.\n- Assessment of past effort:\n  - The individual policy undertakings presented at the IMFC meeting in April 2007 were widely viewed as appropriate.\n  - The exercise failed to bring about sufficient concrete policy action to avoid the building crisis.\n  - Possible reasons for failure cited: perceived Fund-conceived and Fund-led nature of the initiative and insufficient political commitment; political unpopularity of the agreed policy actions, despite being in participants’ interest.\n- Implication:\n  - The crisis may have demonstrated more clearly the value of economic policy collaboration, making the Framework approach potentially more convincing than in 2007."
    },
    {
      "heading": "IMF governance reform and quota realignment",
      "content": "- IMFC endorsement:\n  - At the Fund’s October 2009 Annual Meetings in Istanbul, the IMFC endorsed the G-20 proposal to shift quota shares toward dynamic emerging market and developing countries by at least 5 percent by shifting shares from over-represented to under-represented countries.\n  - This move is to be in addition to the changes agreed under the 2008 Quota and Voice Reforms.\n- Quota review process:\n  - The 14th General Quota Review is under way and is expected to be completed by January 2011 (two years earlier than the formal deadline).\n  - The Review will consider two broad issues—the overall adequacy of Fund quotas and the distribution of quotas.\n- Expected outcomes and significance:\n  - Success would eliminate significant misalignment in quota shares relative to measures of relative economic weight.\n  - This would reduce the basis for disputing the legitimacy of the Fund’s decision-making process and should enhance the IMF’s effectiveness, including better representation of the views of the nearly 170 Fund member countries that are not members of the G-20."
    },
    {
      "heading": "Fund size, mandate, and crisis-prevention capabilities",
      "content": "- Resource adequacy:\n  - The review of the overall size of the Fund's quotas should better align the Fund's resources with the tasks facing the institution.\n  - Lessons from the crisis have informed the Fund’s examination of its prospective role, with a focus on how it can help to strengthen systemic stability.\n- Instruments and surveillance:\n  - The success of the Fund's innovative Flexible Credit Line has demonstrated the relevance of precautionary, insurance-like facilities.\n  - The Fund is studying how it might further improve its crisis-prevention capability.\n  - The Fund intends to improve its focus on multilateral and financial sector surveillance, with the goal of bolstering its contribution to systemic stability.\n\nChanging Times: Global Governance Reform and the IMF — John Lipsky, January 11, 2010\n\n---\n\n\n References\n\n- implement the Framework\n- meeting in April 2007\n- October 2009 Annual Meetings\n- 2008 Quota and Voice Reforms\n- Flexible Credit Line\n\nSource: https://www.imf.org/en/blogs/articles/2010/01/11/global-governance-reform"
    }
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    "Authors: John Lipsky",
    "Published: January 11, 2010",
    "Author: John Lipsky",
    "Date: January 11, 2010",
    "Central premise: The 2008/2009 economic and financial crisis highlighted a shift in relative economic weight toward dynamic emerging market economies, prompting changes in global governance and a stronger role for the G-20 and the IMF.",
    "Findings:",
    "IMF role:",
    "Near-term objective:",
    "Historical reference:",
    "Assessment of past effort:",
    "Implication:",
    "IMFC endorsement:",
    "Quota review process:",
    "Expected outcomes and significance:",
    "Resource adequacy:",
    "Instruments and surveillance:",
    "[implement the Framework](http://www.imf.org/external/np/sec/pr/2009/pr09330.htm)",
    "[meeting in April 2007](http://www.imf.org/external/np/sec/pr/2007/pr0771.htm)",
    "[October 2009 Annual Meetings](http://www.imf.org/external/np/sec/pr/2009/pr09347.htm)",
    "[2008 Quota and Voice Reforms](http://www.imf.org/external/np/exr/facts/quotas.htm)",
    "[Flexible Credit Line](http://www.imf.org/external/np/pdr/fac/2009/032409.htm)"
  ],
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