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March 19, 2009

Double Majorities at the World Bank and IMF: For Legitimacy and Effectiveness

Posted by Nancy Birdsall in Remarks from the Chair Tags: , , , , , , ,

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Every crisis provides an opportunity. In the case of the still-oncoming global economic and jobs crisis, the opportunities facing the Obama administration include the chance to lead on fundamental reforms of the governance at the two major international financial institutions: the IMF and the World Bank.

In their current form—as Western-dominated trans-Atlantic clubs—these institutions lack legitimacy and are thus handicapped in meeting the urgent and complex needs of the 21st century.  President Obama should be prepared to argue—including to the possibly recalcitrant U.S. Congress—that outmoded institutions work for nobody, not even the American people.  To regain legitimacy, the IMF and the World Bank must become truly global cooperatives in which the developing nations have much greater representation than they have now. By leading this overdue governance reform effort, the United States can reclaim its role as champion of an open and inclusive global economic system.

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