The IMF and the challenge of global monetary governance
Higgott, R. and Hodder, J. (2014) The IMF and the challenge of global monetary governance. In: Telo, Mario, (ed.) Globalisation, multilateralism, Europe: Towards a better global governance? Ashgate, Burlington, VT, pp. 215-226.
*Open access. Some pages may not be available
This chapter provides an overview of the challenges involved in regulating the international financial system, addressing the role of the IMF, the continuing sources of instability, and the barriers to effective international cooperation in this policy area. The IMF has extensive research capability and efficient organisational structure, but misses State-like powers and remains subordinate to, but central to, the G20 as the principal rescue agent and supporter of longer term economic stability in global contemporary economic governance. The IMF's position of systemic economic importance is thus somewhat paradoxical. Its formal ambition does (and has always) overreach its actual mandate. But in any standoff with a sovereign government it invariably acknowledges that it has no power to turn technical advice into a formal legal right to implement, as opposed to advocate, policy change. It must rely on the authority of argument rather than the power of statute in a residual era of sovereign States. The challenge of international financial regulation is to reduce the frequency and severity of economic crises while at the same time maximising the prosperity of humanity and the planet on which we live. But this will only happen if the struggle between financial power struggle and rulesbased behaviour, a hallmark of the present system, can be balanced. Contrary to the pietistic chimera of the cosmopolitan theorist, even on the smaller, more practical canvas of twenty-first century economic institutional multilateralism, cooperative, collective action problem-solving will remain constrained by both national and international politics. Coordination in the global financial system is to be encouraged but responsibility for regulation will remain largely a 'host country' activity.
|Publication Type:||Book Chapter|
|Item Control Page|