The IMF's Imprudent Role As Lender of Last Resort

Throughout history, financial collapses have been defining moments for public policy. Crises promote action, embodied in new financial institutions or policy doctrines. The motives that underlie such policies are sometimes short-sighted--driven by short-run pressures rather than long-run principles--and it is easier to enact unwise policy in the midst of crisis than to reverse course after the crisis has passed, after policies become embodied in institutions or statutes.