Pros And Cons Of The IMF

This failure was harshly criticized by some economists as a failure of the "one size fits all" Washington Consensus approach (Stiglitz, 2008). Also, IMF itself admitted some responsibility and mistakes in worsening Argentina crisis (Conway, 2004). Anyway, while IMF never considered the Washington Consensus approach as the root of the problems in Argentina, and explained its faults as being a matter of growth forecast errors (Blanchard & Leigh, 2013), most of the widely agreed criticisms to IMF targeted exactly the Washington Consensus approach and the mindset behind it: "Government as the problem, and markets as the solution" (Stiglitz, 2008, n.d.). In practice, IMF is sometimes perceived as an institution much more involved in liberalization and privatization than in solving economic crisis, and this perception fuels hostile feelings among the population of assisted countries suffering for structural reforms. So, though it is still not proven that the Washington Consensus policies are definitely wrong, it is clear enough that IMF should revise its approach and mindset and should take more care of the social outcome of the economic policies it requests, if it wants to stop being blamed for social riots. A simple way to achieve this goal could be the sharing of risks and responsibilities for erroneous policies that IMF dictates. The righteousness of policies could be judged in respect to the spread between real growth

The IMF has a history with the country of Pakistan which may be viewed as very problematic for the people of the country – depending on who you ask. In my research for one specific problem to write about pertaining this issue, I decided to encompass the entire project of Pakistan, which to many would be considered a massive failure on the part of the IMF and the ruling elite class of Pakistan.

8. Explain how the policymaking power is distributed among the countries that belong to the World Bank and IMF.

•Examine the role that the International Monetary Fund and World Bank play in transfers and the conditions they set to effect this funding.

Definition: Organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Based on what I read, the IMF and the World Bank are good organizations. The purpose of them it's to prevent economies crises and when they were founded, help to rebuild economies affected because of war. However, I found one project on the internet shows the opposite. The support for this project from World Bank gave was indirect because one of its own organizations, the International Finance Corp provided loans to an American company

participants in this conference created three organizations to help regulate the international economy. The first is the International Monetary Fund (IMF) which was established with the idea of regulating monetary policy. One of the benchmarks of the IMF is the stabilization of exchange rates and the loaning of money to help stabilize countries with balance of payments deficits. The second organization established was the General Agreement on Tariffs and Trade (GATT) whose main focus was on a liberal trading order.

Consequences regarding the international businesses and the flow of trade and investment among the three countries are given below as benefits and drawbacks of holding fixed exchange rate system-

Throughout, there is a keen sense that the IMF is completely guided by ideology which is focused on the free market and the markets’ ability to guide the economy properly at all times. It would seem that all those who work at the IMF are misguided and/or towing the party line in the form of the Washington Consensus. Moreover, of greater concern is perhaps that throughout this piece, it would seem that the World Bank could do no wrong. Stiglitz portrays himself and the World Bank as the white knight(s) who were championing the rights of those who could not fight for themselves against the US government, the US Treasury and even the Federal Reserve. He does so with little regard to any policies or actions that these organizations have done for positive reasons or with positive results. He displays unwavering support for governments to stimulate aggregate demand via social spending, so it is surprising that he is so punitive towards Western governments.

The three major international economic institutions are the International Monetary Fund (IMF), the World Bank and the World Trade Organization; this book mainly focuses on the IMF and the World Bank, due to the author’s first-hand experience with both institutions. The IMF, a public institution built as a guiding hand for economic stability around the world, has brought false

Here the International Monetary Fund and the International Bank for Reconstruction and Development, later divided into the World Bank and Bank for International Settlement, were established. To regulate the international policy economy these institutions become known as the Bretton Woods institutions and became operational in 1946. The IMF, founded to stabilize countries' currencies in relation to each other, holds money in trust, which member countries can borrow according to terms set by the institution. The World Bank instead gives more long-term loans and sells bonds to corporations and governments, which bind the issuer to pay the bondholder the amount of the loan plus interest. However, the countries taking advantage of the opportunity to borrow money to improve their affected economy are obliged to launch a set of policies, known as the Washington Consensus, which was first presented in 1989. The reforms introduced by the Institute for International Economics include "deregulation, privatization, currency devaluation, social spending cuts, lower corporate taxes, export driven strategies, and removal of foreign investment restrictions" . More, "these loans are only granted when the countries agree to the adoption to a comprehensive programme of macro-economic stabilization and structural economic reform."

This point of view explored functions for agencies such IMF and World Bank would discussed at last part of this essay.

The World Bank was founded at the Bretton Woods Conference in 1944. The bank was first known as the International Bank of Reconstruction and Development. Their founding mission was to help countries during a post-war World War II era rebuild and reconstruct. They did this by providing loans to countries who had been destroyed during wars. Their first loan was made in 1947 to France to rebuild following World War II ("World Bank Group"). The World Banks’s mission eventually evolved to eliminating poverty globally. The social component of their new mission is was sets them apart from the International Monetary Fund. With the change of their mission the objectives of their loan also changed. “Development projects reflected people-oriented objectives rather than exclusively the construction of material structures. Projects related to food production, rural and urban development, and population, health and nutrition were designed to reach the poor directly.” ("World Bank Group"). These loans have low interest rates and were made to facilitate social development in third world countries and help them succeed in the long run. The Bank is headquartered in Washington D.C and has always had an American serve as president of the bank (Iyer). Major decisions for the Bank are made by the Board of Governors and the Board of Executives ("World Bank Group").

1.The international financial institutions (IFIs) are central pillars and the architects of the global economy. The world bank and IMF were founded and funded by the United states after the second world war to build shattered world economy after the war and great depression of the 1930s (socialist alternative,). The creation of the IFIs was to bring about a global economy after the “isolation economy” which some argue brought about the Second World War. The IFIs were to help the economy of the less developing countries (LDCs) to bring about growth and development, a phenomenon known as globalization.

In the year of 1327, Kind Edward III of England defaulted on his Italian debts. This caused the banks of Bardi and Peruzzi in Florence to collapse. Who would know that over 650 years later, the world would still have these types of problems? After World War II, the need for an organization like the IMF was finally realized. After the war, politicians and economists began to work on blue prints for a postwar world. They envisioned a liberal international economic order, based on stable world currencies and revived world trade. The International Monetary Fund (IMF) finally came into existence on December 27, 1945. On this date, twenty-nine