Reform of the IMF and World Bank

Reform of the IMF and World Bank has been the focus of discussion since the middle of the last decade when efforts began to adapt the two institutions to deal with new problems of financial globalization associated with a series of financial crises among emerging markets. What began as a mainly “top-down†approach to institutional reform led by the major industrial countries has been broadened to a more comprehensive assessment of the role of the two Bretton Woods institutions in the international economic system, partly in response to “bottom up†pressures from international NGOs and other external stakeholders. Improvements have been made in the role of the two institutions in crisis prevention and crisis management, but a number of other important reforms have been under active debate and require implementation. Most importantly, changes in the governance structure of the Bank and Fund are required to restore the legitimacy and effectiveness of these institutions in the international system.