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Who Is Runninc the IMF: Critical Shareholders or the Staff?

Author

Listed:
  • Michele FRATIANNI

    (Indiana University, Graduate School of Business Bloomington)

  • John PATTISON

    (Canadian Imperial Bank of Commerce)

Abstract

The paper deals with the principal-agent relationship at the International Monetary Fund (IMF). We argue that residual control rights at the IMF are vested with the critical shareholders, the countries included in the G-7. This group controls vast financial resources and enjoys the highest regulatory and governance standards among IMF members. Imperfect incentives for monitoring and the complexity of the issues give staff and management a degree of autonomy. The evidence marshalled in the paper suggests that critical shareholders are in charge on those issues they care most about, leaving discretion to staff and management on peripheral issues.

Suggested Citation

  • Michele FRATIANNI & John PATTISON, 2007. "Who Is Runninc the IMF: Critical Shareholders or the Staff?," Working Papers 279, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  • Handle: RePEc:anc:wpaper:279
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    Cited by:

    1. Ugo FRATESI, 2010. "The National and International Effects;of Regional Policy Choices: Agglomeration Economies, Peripherality and Territorial Characteristics," Working Papers 344, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    2. Dreher, Axel & Vreeland, James Raymond, 2011. "Buying votes and international organizations," University of Göttingen Working Papers in Economics 123, University of Goettingen, Department of Economics.
    3. Dreher, Axel & Lang, Valentin & Rosendorff, B. Peter & Vreeland, James Raymond, 2018. "Buying Votes and International Organizations: The Dirty Work-Hypothesis," CEPR Discussion Papers 13290, C.E.P.R. Discussion Papers.
    4. Fabio FIORILLO & Agnese SACCHI, 2010. "I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem," Working Papers 346, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    5. Axel Dreher & Jan-Egbert Sturm, 2012. "Do the IMF and the World Bank influence voting in the UN General Assembly?," Public Choice, Springer, vol. 151(1), pages 363-397, April.
    6. Axel Dreher, 2009. "IMF conditionality: theory and evidence," Public Choice, Springer, vol. 141(1), pages 233-267, October.
    7. Ryan Higgitt, 2013. "Colonialism, Casteism and Development: South-South Cooperation as a ‘New’ Development Paradigm," Working Papers 112, International Policy Centre for Inclusive Growth.
    8. Dreher, Axel & Nunnenkamp, Peter & Öhler, Hannes, 2012. "Why it pays for aid recipients to take note of the Millennium Challenge Corporation: Other donors do!," Economics Letters, Elsevier, vol. 115(3), pages 373-375.
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    10. Axel Dreher, 2005. "Does the IMF Influence Fiscal and Monetary Policy?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(3), pages 225-238.
    11. Robert Brown, 2010. "Measuring Delegation," The Review of International Organizations, Springer, vol. 5(2), pages 141-175, June.
    12. Sieglinde Gstöhl, 2007. "Governance through government networks: The G8 and international organizations," The Review of International Organizations, Springer, vol. 2(1), pages 1-37, March.
    13. Andrea F. Presbitero & Alberto Zazzaro, 2010. "IMF Lending in Low- and Middle-Income Countries in the Wake of the Global Crisis," Development Working Papers 305, Centro Studi Luca d'Agliano, University of Milano.
    14. repec:got:cegedp:99 is not listed on IDEAS
    15. Luca RICCETTI, 2011. "A Copula-GARCH Model for Macro Asset Allocation of a Portfolio with Commodities: an Out-of-Sample Analysis," Working Papers 355, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    16. Andrea Filippo Presbitero & Alberto Zazzaro, 2010. "The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded," Mo.Fi.R. Working Papers 35, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
    17. Axel Dreher & Silvia Marchesi & James Raymond Vreeland, 2007. "The Politics of IMF Forecasts," KOF Working papers 07-176, KOF Swiss Economic Institute, ETH Zurich.
    18. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2006. "Does Membership on the UN Security Council Influence IMF Decisions? Evidence from Panel Data," CESifo Working Paper Series 1808, CESifo.
    19. Marko Malovic, 2009. "International Financial Crisis, G-20 And Global Policy Response," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 5(10), pages 119-127.
    20. Elena AMBROSETTI & Eralba CELA & Tineke FOKKEMA, 2011. "The Remittances Behaviour of the Second Generation in Europe: Altruism or Self-Interest?," Working Papers 368, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    21. Bessma Momani, 2007. "IMF staff: Missing link in fund reform proposals," The Review of International Organizations, Springer, vol. 2(1), pages 39-57, March.
    22. Luca RICCETTI, 2010. "Minimum Tracking Error Volatility," Working Papers 340, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    23. Eric Werker, 2012. "The Political Economy of Bilateral Foreign Aid," Harvard Business School Working Papers 13-026, Harvard Business School.

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    More about this item

    Keywords

    critical shareholder; g-7; imf; principal-agent relationship; staff autonomy;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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