WHEN WILL ECONOMICS GUIDE IMF AND WORLD BANK REFORMS

The “Report of the International Financial Institution Advisory Commission” (IFIAC 2000), released in March, is a blueprint for reforming the International Monetary Fund, the World Bank, and other multilateral development banks. That report, known as the “Meltzer Commission Report” (Allan H. Meltzer was chairman of the IFIAC), was signed by a bipartisan majority of 8 to 3. It has generated its share of criticism from opponents in the commission minority, the Clinton administration, labor unions, and Congress. 1 Since our report was published, it has become clear to me that two separate debates are being waged over the new “global financial architecture.” One is the narrow (visible) debate over the technical aspects of specific proposals for designing mechanisms to achieve well-defined economic objectives. The other is a broader (less visible) debate over whether the IMF, the World Bank, and the other development banks should have narrowly defined economic objectives or alternatively, be used as tools of ad hoc diplomacy. Until we settle that second, broader political debate, we cannot seriously even begin the constructive dialogue over how best to achieve economic objectives. That dialogue is important; our proposals are a starting point for