The IMF
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The IMF and World Bank were created at Bretton Woods to promote international monetary cooperation and economic development. The IMF aimed to facilitate trade and balanced economic growth while maintaining monetary stability. It provides resources to help countries address balance of payments issues without destructive policies. The World Bank focuses on long-term development loans and infrastructure projects to help low-income countries, later expanding to human capital development and poverty reduction. The IMF also offers technical assistance to help new countries establish institutions like central banks.
The IMF
- 1. The IMF: A Second Best OptionHere to Prove that the IMF does not seek to exploit
- 2. The Beginning of the IMF and WBCountries respond to interwar period chaos with:exchange rate manipulation import barriersrestrictive bilateral agreementsBretton Woods Institutions: balance discipline and cooperation with freedom of action through monetary policieshttp://029f1d9.netsolhost.com/sh/?page_id=202
- 3. ExploitationMarxist TheoryMarx believed that Capitalism and Free Markets were exploitative in their very natureNeoclassical TheoriesExploitation is a kind of Market FailureIncludes both Top-Down and Bottom Up ExploitationCan be corrected to create a more complete market by:MonitoringRisk-sharing agreementsBondingDefining Property RightsNew Liberal TheoriesVery similar to Marxism, but exploitation is an inefficiency, thus hurting economic growth rather than encouraging it
- 7. Original Purpose of the IMFThe purposes of the International Monetary Fund are: To create a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members.To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation. To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade. To give confidence to members by making the Fund's resources available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.
- 8. The World BankAlso Known as the International Bank for Reconstruction and Development (IBRD)Primary Objective: provide or support long-term loans for the reconstruction of Europe and the development of low-income countriesThe Marshall Plan largely solved the European ProblemsIBRD began helping the Developing World building infrastructure: roads, railways and telecommunications.Later created a new focus on human capital development.
- 10. The Millennium Development Goals
- 11. Examples of Poverty Reduction
- 13. Technical Assistance1964: Began to offer TA to help establish central banks for newly independent nations70 persons by 1970; 300 persons todayTypes of TA provided by the IMF:design and implementation of fiscal and monetary policiesinstitution building; e.g. development of central banksdrafting and review of economic and financial legislation.