And Then the Future of the IMF

Here’s a follow-up to Julian’s question about the World Bank – what’s the future role of the IMF?  Interesting news story in the WSJ over the weekend on whether the IMF might become, as its chief would like, a quasi-central bank to the world – or instead, as the article suggests is the tenor of the G 20 meetings, a sort of administrative staff of the G 20.  I live on a cul de sac in DC where the neighbors have, during a period of years, nearly all been either IMF or Bank senior staff, so I’ve had these discussions a lot and close to home over the years.  I don’t actually think things will work out along either of those paths with respect to the IMF; successful central banking requires a central government.  And although the IMF might be very interested in becoming the administrative arm of the G 20, the problem lies with the undefined nature of the G 20, irrespective of the IMF.  The G 20 couldn’t function as a policy body when it was the G3, G7, G8, G x.  Apart from multiplying parties with, if anything, a greater disparity of economic conditions and fundamental economic interests, what has changed?  My guess is that the IMF will elaborate a role in fact, as opposed to its annual confabs, in which it does what it has done reasonably well in the current crisis – facilitate the liquidity bailout of smaller, but not truly basket-case, economies, such as Eastern Europe, Iceland, the Baltics, places like that.  That seems like a lot on its plate, frankly, just with that task.