The International Monetary Fund (IMF) is an international organization that was created on July 22, 1944 at the Bretton Woods Conference and came into existence on December 27, 1945 when 29 countries signed the Articles of Agreement^[1]. It originally had 45 members. The IMF's stated goal was to stabilize exchange rates and assist the reconstruction of the world’s international payment system post World War II. Countries contribute money to a pool through a quota system from which countries with payment imbalances can borrow funds on a temporary basis. Through this activity and others such as surveillance of its members' economies and policies, the IMF works to improve the economies of its member countries.^[2] The IMF describes itself as “an organization of 188 countries (as of April 2012), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.” The organization's stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs.^[3] Its headquarters are in Washington, D.C.

History[link]

IMF "Headquarters 1" in Washington, D.C.

The International Monetary Fund was originally created as part of the Bretton Woods system exchange agreement in 1944.^[4] During the Great Depression, countries sharply raised barriers to foreign trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade.^[5] This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met in the Mount Washington Hotel in the area of Bretton Woods, New Hampshire in the United States, and agreed on a framework for international economic cooperation to establish post-World War II. The participating countries were concerned with the rebuilding of Europe and the global economic system after the war.

There were two views on the role the IMF should assume as a global economic institution at the Bretton Woods Conference. British economist John Maynard Keynes imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped governments and to act as the US government had during the New Deal in response to World War II. American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time.^[6] Most of White’s plan was incorporated into the final acts adopted at Bretton Woods.

The IMF was formally organized on December 27, 1945, when the first 29 countries signed its Articles of Agreement. The International Monetary Fund was one of the key organizations of the international economic system; its design allowed the system to balance the rebuilding of international capitalism with the maximization of national economic sovereignty and human welfare, also known as embedded liberalism.^[7]

In 1947, France became the first country to borrow from the IMF.^[5] The IMF’s influence in the global economy steadily increased as it accumulated more members. The number of IMF member countries has more than quadrupled from the 44 states involved in its establishment, reflecting in particular the attainment of political independence by many African countries and more recently the 1991 dissolution of the Soviet Union because most countries in the Soviet Sphere of influence did not join the IMF.^[5]

The Bretton Woods system prevailed until 1971, when the U.S. government suspended the convertibility of the dollar (and dollar reserves held by other governments) into gold. This is known as the Nixon Shock.^[5] As of January 2012, the largest borrowers from the fund in order are Greece, Portugal, Ireland, Romania and Ukraine.^[8]

Member countries[link]

  IMF member states

  IMF member states not accepting the obligations of Article VIII, Sections 2, 3, and 4^[9]

The members of the IMF are 188 members of the UN and the Republic of Kosovo^[a].^[10][11] All members of the IMF are also International Bank for Reconstruction and Development (IBRD) members and vice versa.^{[citation needed]}

Former members are Cuba (which left in 1964)^[12] and the Republic of China, which was ejected from the UN in 1980 after losing the support of then U.S. President Jimmy Carter and was replaced by the People's Republic of China.^[13]

Apart from Cuba, the other states that do not belong to the IMF are North Korea, Andorra, Monaco, Liechtenstein, Nauru, Cook Islands, Niue, Vatican City, and the states with limited recognition (other than Kosovo).

Qualifications[link]

Any country may apply to be a part of the IMF. Post-IMF formation, in the early postwar period, rules for IMF membership were left relatively loose. Members needed to make periodic membership payments towards their quota, to refrain from currency restrictions unless granted IMF permission, to abide by the Code of Conduct in the IMF Articles of Agreement, and to provide national economic information. However, stricter rules were imposed on governments that applied to the IMF for funding.^[14]

The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates secured at rates that could be adjusted only to correct a "fundamental disequilibrium" in the balance of payments, and only with the IMF's agreement.^[15]

Some members have a very difficult relationship with the IMF and even when they are still members they do not allow themselves to be monitored. Argentina for example refuses to participate in an Article IV Consultation with the IMF.^[16]

Benefits[link]

Member countries of the IMF have access to information on the economic policies of all member countries, the opportunity to influence other members’ economic policies, technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties, and increased opportunities for trade and investment^[17]

Leadership[link]

Board of Governors[link]

The Board of Governors consists of one governor and one alternate governor for each member country. Each member country appoints its two governors. The Board normally meets once a year and is responsible for electing or appointing executive directors to the Executive Board. While the Board of Governors is officially responsible for approving quota increases, special drawing right allocations, the admittance of new members, compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws, in practice it has delegated most of its powers to the IMF's Executive Board. ^[18]

The Board of Governors is advised by the International Monetary and Financial Committee and the Development Committee. The International Monetary and Financial Committee has 24 members and monitors developments in global liquidity and the transfer of resources to developing countries.^[19] The Development Committee has 25 members and advises on critical development issues and on financial resources required to promote economic development in developing countries. They also advise on trade and global environmental issues.^[19]

Executive Board[link]

24 Executive Directors make up Executive Board. The Executive Directors represent all 188 member-countries. Countries with large economies have their own Executive Directo, but most countries are grouped in constituencies representing four or more countries.^[18]

Following the 2008 Amendment on Voice and Participation, eight countries each appoint an Executive Director: the United States, Japan, Germany, France, the United Kingdom, China, the Russian Federation, and Saudi Arabia.^[20] The remaining 16 Directors represent constituencies consisting of 4 to 22 countries. The Executive Director representing the largest constituency of 22 countries accounts for 1.55% of the vote.

Managing Director[link]

The IMF is led by a Managing Director, who is head of the staff and serves as Chairman of the Executive Board. The Managing Director is assisted by a First Deputy Managing Director and three other Deputy Managing Directors.^[18]Historically the IMF’s managing director has been European and the president of the World Bank has been from the United States. However, this standard is increasingly being questioned and competition for these two posts may soon open up to include other qualified candidates from any part of the world.^[21][22] In 2011 the world's largest developing countries, the BRIC nations, issued a statement declaring that the tradition of appointing a European as managing director undermined the legitimacy of the IMF and called for the appointment to be merit-based.^[22][23]The head of the IMF's European department is António Borges of Portugal, former deputy governor of the Bank of Portugal. He was elected in October 2010.^[24]

Dates	Name	Nationality
May 6, 1946 – May 5, 1951	Camille Gutt	Belgium
August 3, 1951 – October 3, 1956	Ivar Rooth	Sweden
November 21, 1956 – May 5, 1963	Per Jacobsson	Sweden
September 1, 1963 – August 31, 1973	Pierre-Paul Schweitzer	France
September 1, 1973 – June 16, 1978	Johannes Witteveen	Netherlands
June 17, 1978 – January 15, 1987	Jacques de Larosière	France
January 16, 1987 – February 14, 2000	Michel Camdessus	France
May 1, 2000 – March 4, 2004	Horst Köhler	Germany
June 7, 2004 – October 31, 2007	Rodrigo Rato	Spain
November 1, 2007 – May 18, 2011	Dominique Strauss-Kahn	France
July 5, 2011 –	Christine Lagarde	France

On June 28, 2011, Christine Lagarde was named Managing Director of the IMF, replacing Dominique Strauss-Kahn.

Previous Managing Director Dominique Strauss-Kahn was arrested in connection with charges of sexually assaulting a New York room attendant. Strauss-Kahn subsequently resigned his position on May 18.^[25] On June 28, 2011 Christine Lagarde was confirmed as Managing Director of the IMF for a five-year term starting on July 5, 2011.^[26][27]

Voting power[link]

Voting power in the IMF is based on a quota system. Each member has a number of “basic votes" (each member's number of basic votes equals 5.502% of the total votes),^[28] plus one additional vote for each Special Drawing Right (SDR) of 100,000 of a member country’s quota.^[29] The Special Drawing Right is the unit of account of the IMF and represents a claim to currency. It is based on a basket of key international currencies. The basic votes generate a slight bias in favor of small countries, but the additional votes determined by SDR outweigh this bias.^[30]

Effects of the quota system[link]

The IMF’s quota system was created to raise funds for loans.^[31] Each IMF member country is assigned a quota, or contribution, that reflects the country’s relative size in the global economy. Each member’s quota also determines its relative voting power. Thus, financial contributions from member governments are linked to voting power in the organization.^[29]This system follows the logic of a shareholder-controlled organization: wealthy countries have more say in the making and revision of rules.^[32] Since decision making at the IMF reflects each member’s relative economic position in the world, wealthier countries that provide more money to the fund have more influence in the IMF than poorer members that contribute less.; nontheless, the IMF focuses on redistribution.^[29]

Developing countries[link]

Quotas are normally reviewed every five years and can be increased when deemed necessary by the Board of Governors. Currently, reforming the representation of developing countries within the IMF has been suggested. ^[29] These countries’ economies represent a large portion of the global economic system but this is not reflected in the IMF's decision making process through the nature of the quota system. Joseph Stiglitz argues "There is a need to provide more effective voice and representation for developing countries, which now represent a much larger portion of world economic activity since 1944, when the IMF was created." ^[33] In 2008, a number of quota reforms were passed including shifting 6% of quota shares to dynamic emerging markets and developing countries^[34].

United States influence[link]

A second criticism is that the United States’ transition to neoliberalism and global capitalism also lead a change in the identity and functions of international institutions like the IMF. Because of the high involvement and voting power of the United States, the global economic ideology could effectively be transformed to match the US's. This is consistent with the IMF’s function change during the 1970s after the Nixon Shock ending the Bretton Woods system. Another criticism is that allies of the United States are able to receive bigger loans with fewer conditions^[4].

Overcoming borrower/creditor divide[link]

The IMF’s membership is divided along income lines: certain countries provide the financial resources while others use these resources. Both developed country “creditors” and developing country “borrowers” are members of the IMF. The developed countries provide the financial resources but rarely enter into IMF loan agreements; they are the creditors. Conversely, the developing countries use the lending services but contribute little to the pool of money available to lend because their quotas are smaller; they are the borrowers. Thus, tension is created around governance issues because these two groups, creditors and borrowers, have fundamentally different interests in terms of the conditions of these loans.^[35]. The criticism is that the system of voting power distribution through a quota system institutionalizes borrower subordination and creditor dominance. The resulting division of the Fund's membership into borrowers and non-borrowers has increased the controversy around conditionality because the borrowering members are interested in making loan access easier while the creditor members want to maintain reassurance the loans will be repaid^[36].

Functions[link]

The IMF works to foster global growth and economic stability. It provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty^[37]. The rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance of payments financing, provide the justiciation for official financing, without which many countires could only correct large external payment imbalances through measures with adverse effects on both national and international economic prosperity^[38]. The IMF can provide other sources of financing to countries in need that would not be available in the absence of an economic stabilization program supported by the Fund.

Upon initial IMF formation, its two primary functions were: to oversee the fixed exchange rate arrangements between countries^[39], thus helping national governments manage their exchange rates and allowing these governments to prioritize economic growth^[40], and to provide short-term capital to aid balance-of-payments ^[39]. This assistance was meant to prevent the spread of international economic crises. The Fund was also intended to help mend the pieces of the international economy post the Great Depression and World War II^[41] .

The IMF’s role was fundamentally altered after the floating exchange rates post 1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine if a shortage of capital was due to economic fluctuations or economic policy. The IMF also researched what types of government policy would ensure economic recovery^[42]. The new challenge is to promote and implement policy that reduces the frequency of crises among the emerging market countries, especially the middle-income countries that are open to massive capital outflows^[43]. Rather than maintaining a position of oversight of only exchange rates, their function became one of “surveillance” of the overall macroeconomic performance of its member countries. Their role became a lot more active because the IMF now manages economic policy instead of just exchange rates.

In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality^[39] , which was established in the 1950s^[41]. Low-income countries can borrow on concessional terms, which means there is a period of time with no interest rates, through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF). Nonconcessional loans, which include interest rates, are provided mainly through Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), and the Extended Fund Facility. The IMF provides emergency assistance via the newly introduced Rapid Financing Instrument (RFI) to all its members facing urgent balance of payments needs^[44].

Surveillance of the global economy[link]

The IMF is mandated to oversee the international monetary and financial system^[45] and monitor the economic and financial policies of its 188 member countries. This activity is known as surveillance and facilitates international cooperation^[46] . Since the demise of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has evolved largely by way of changes in procedures rather than through the adoption of new obligations^[45] . The responsibilities of the Fund changed from those of guardian to those of overseer of members’ policies.

The Fund typically analyzes the appropriateness of each member country’s economic and financial policies for achieving orderly economic growth, and assesses the consequences of these policies for other countries and for the global economy<refname="IMF Surveillance: A Case Study on IMF Governance" /> .

IMF Data Dissemination Systems participants:

  IMF member using SDDS

  IMF member using GDDS

  IMF member, not using any of the DDSystems

  non-IMF entity using SDDS

  non-IMF entity using GDDS

  no interaction with the IMF

In 1995 the International Monetary Fund began work on data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public. The International Monetary and Financial Committee (IMFC) endorsed the guidelines for the dissemination standards and they were split into two tiers: The General Data Dissemination System (GDDS) and the Special Data Dissemination Standard (SDDS).

The International Monetary Fund executive board approved the SDDS and GDDS in 1996 and 1997 respectively, and subsequent amendments were published in a revised Guide to the General Data Dissemination System. The system is aimed primarily at statisticians and aims to improve many aspects of statistical systems in a country. It is also part of the World Bank Millennium Development Goals and Poverty Reduction Strategic Papers.

The primary objective of the GDDS is to encourage IMF member countries to build a framework to improve data quality and increase statistical capacity building. Upon building a framework, a country can evaluate statistical needs, set priorities in improving the timeliness, transparency, reliability and accessibility of financial and economic data. Some countries initially used the GDDS, but later upgraded to SDDS.

Some entities that are not themselves IMF members also contribute statistical data to the systems:

•  Palestinian National Authority – GDDS
•  Hong Kong – SDDS
•  Macau - GDDS^[47]
•  European Union institutions:
  • the European Central Bank for the Eurozone – SDDS
  • Eurostat for the whole EU – SDDS, thus providing data from  Cyprus (not using any DDSystem on its own) and  Malta (using only GDDS on its own)

Conditionality of loans[link]

IMF conditionality is a set of policies or “conditions” that the IMF requires in exchange for financial resources^[39]. The IMF does not require collateral from countries for loans but rather requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform. If the conditions are not met, the funds are withheld^[39]. Conditionality is perhaps the most controversial aspect of IMF policies^[48] . The concept of conditionality was introduced in an Executive Board decision in 1952 and later incorporated in the Articles of Agreement.

Conditionality is associated with economic theory as well as an enforcement mechanism for repayment. Stemming primarily from the work of Jacques Polak in the Fund’s research department, the theoretical underpinning of conditionality was the “monetary approach to the balance of payments."^[41]

Benefits[link]

These loan conditions ensure that the borrowing country will be able to repay the Fund and that the country won’t attempt to solve their balance of payment problems in a way that would negatively impact the international economy^{[49] [50]} . The incentive problem of moral hazard, which is the actions of economic agents maximizing their own utility to the detriment of others when they do not bear the full consequences of their actions, is mitigated through conditions rather than providing collateral; countries in need of IMF loans do not generally possess internationally valuable collateral anyway<refname="IMF Conditionality and Country Ownership of Programs" />. Conditionality also reassures the IMF that the funds lent to them will be used for the purposes defined by the Articles of Agreement and provides safeguards that country will be able to rectify its macroeconomic and structural imbalances^[50]. In the judgment of the Fund, the adoption by the member of certain corrective measures or policies will allow it to repay the Fund, thereby ensuring that the same resources will be available to support other members^[48].

Some critics assume that Fund lending imposes a burden on creditor countries. However, countries receive market-related interest rates on most of their quota subscription, plus any of their own-currency subscriptions that are loaned out by the Fund, plus all of the reserve assets that they provide the Fund. Also, as of 2005 borrowing countries have had a very good track record of repaying credit extended under the Fund's regular lending facilities with the full interest over the duration of the borrowing ^[38].

Criticisms[link]

The IMF has the obstacle of being unfamiliar with local economic conditions, cultures, and environments in the countries they are requiring policy reform^[39]. The Fund knows very little about what public spending on programs like public health and education actually means, especially in African countries; they have no feel for the impact that their proposed national budget will have on people. The economic advice the IMF gives might not always take into consideration the difference between what spending means on paper and how its felt by citizens^[51]. For example, Jeffrey Sach's work shows that "the Fund’s usual prescription is 'budgetary belt tightening to countries who are much too poor to own belts'^[51]." The IMF’s role as a generalist institution specializing in macroeconomic issues needs reform. Conditionality has also been criticized because a country can pledge collateral of “acceptable assets” in order to obtain waivers on certain conditions^[50]. However, that assumes that all countries have the capability and choice to provide acceptable collateral.

One view is that conditionality undermines domestic political institutions ^[52] . The recipient governments are sacrificing policy autonomy in exchange for funds, which can lead to public resentment of the local leadership for accepting and enforcing the IMF conditions. Political instability can result from more leadership turnover as political leaders are replaced in electoral backlashes.^[39]. IMF conditions are often criticized for their bias against economic growth and reduce government services, thus increasing unemployment^[41] . Another criticism is that IMF programs are only designed to address poor governance, excessive government spending, excessive government intervention in markets, and too much state ownership<refname="The End of Poverty" />. This assumes that this narrow range of issues represents the only possible problems; everything is standardized and differing contexts are ignored^[51]. A country may also be compelled to accept conditions it would not normally accept had they not been in a financial crisis in need of assistance^[48].

It is claimed that conditionalities retard social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programs lead to an increase in poverty in recipient countries.^[53] The IMF sometimes advocates “austerity programmes,” cutting public spending and increasing taxes even when the economy is weak, in order to bring budgets closer to a balance, thus reducing budget deficits. Countries are often advised to lower their corporate tax rate. In Globalization and Its Discontents, Joseph E. Stiglitz, former chief economist and senior vice president at the World Bank, criticizes these policies.^[54] He argues that by converting to a more monetarist approach, the purpose of the fund is no longer valid, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF “was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community.”^[55]

Reform[link]

The IMF is only one of many international organizations and it is a generalist institution for macroeconomic issues only; its core areas of concern in developing countries are very narrow. One proposed reform is a movement towards close partnership with other specialist agencies in order to better productivity. The IMF has little to no communication with other international organizations such as UN specialist agencies like UNICEF, the Food and Agriculture Organization (FAO), and the United Nations Development Program (UNDP)^[51]. Jeffrey Sachs argues in The End of Poverty: “international institutions like the International Monetary Fund (IMF) and the World Bank have the brightest economists and the lead in advising poor countries on how to break out of poverty, but the problem is development economics”^[51]. Development economics needs the reform, not the IMF. He also notes that IMF loan conditions need to be partnered with other reforms such as trade reform in developed nations, debt cancellation, and increased financial assistance for investments in basic infrastructure in order to be effective^[51]. IMF loan conditions cannot stand alone and produce change; they need to be partnered with other reforms.

Use[link]

A recent study reveals that the average overall use of IMF credit per decade increased, in real terms, by 21% between the 1970s and 1980s, and increased again by just over 22% percent from the 1980s to the 1991–2005 period. Another study has suggested that since 1950 the continent of Africa alone has received $300 billion from the IMF, the World Bank and affiliate institutions^[56]

A study done by Bumba Mukherjee found that developing democratic countries benefit more from IMF programs than developing autocratic countries because policy-making, and the process of deciding where loaned money is used, is more transparent within a democracy^[56]. One study done by Randall Stone found that although earlier studies found little impact of IMF programs on balance of payments, more recent studies using more sophisticated methods and larger samples “usually found IMF programs improved the balance of payments.”^[4]

IMF and globalization[link]

Globalization encompasses three institutions: global financial markets and transnational companies, national governments linked to each other in economic and military alliances led by the US, and rising “global governments” such as World Trade Organization (WTO), IMF, and World Bank ^[57]. Charles Derber argues in his book People Before Profit, "These interacting institutions create a new global power system where sovereignty is globalized, taking power and constitutional authority away from nations and giving it to global markets and international bodies."^[57] Titus Alexander argues that this system institutionalises global inequality between western countries and the Majority World in a form of global apartheid, in which the IMF is a key pillar. ^[58]

The establishment of globalized economic institutions has been both a symptom of and a stimulus for globalization. The development of the World Bank, the IMF. regional development banks such as the European Bank for Reconstruction and Development (EBRD), and, more recently, multilateral trade institutions such as the WTO indicates the trend away from the dominance of the state as the exclusive unit of analysis in international affairs. Globalization has thus been transformative in terms of a reconceptualizing of state sovereignty. ^[59] .

Following U.S. President Bill Clinton's administration’s aggressive financial deregulation campaign in the 1990s, globalization leaders overturned long-standing restrictions by governments that limited foreign ownership of their banks, deregulated currency exchange, and eliminated restrictions on how quickly money could be withdrawn by foreign investors^[57]

Criticism[link]

Overseas Development Institute (ODI) research undertaken in 1980 pointed to five main criticisms of the IMF which support the analysis that it is a pillar of global apartheid. ^[60]. Firstly, developed countries were seen to have a more dominant role and control over less developed countries (LDCs) primarily due to the Western bias towards a capitalist form of the world economy with professional staff being Western trained and believing in the efficacy of market-oriented policies.

Secondly, the Fund worked on the incorrect assumption that all payments disequilibria were caused domestically. The Group of 24 (G-24), on behalf of LDC members, and the United Nations Conference on Trade and Development (UNCTAD) complained that the Fund did not distinguish sufficiently between disequilibria with predominantly external as opposed to internal causes. This criticism was voiced in the aftermath of the 1973 oil crisis. Then LDCs found themselves with payments deficits due to adverse changes in their terms of trade, with the Fund prescribing stabilisation programmes similar to those suggested for deficits caused by government over-spending. Faced with long-term, externally generated disequilibria, the Group of 24 argued that LDCs should be allowed more time to adjust their economies and that the policies needed to achieve such adjustment are different from demand-management programmes devised primarily with internally generated disequilibria in mind.

The third criticism was that the effects of Fund policies were anti-developmental. The deflationary effects of IMF programmes quickly led to losses of output and employment in economies where incomes were low and unemployment was high. Moreover, it was sometimes claimed that the burden of the deflationary effects was borne disproportionately by the poor.

Fourthly is the accusation that harsh policy conditions were self-defeating where a vicious circle developed when members refused loans due to harsh conditionality, making their economy worse and eventually taking loans as a drastic medicine.

Lastly is the point that the Fund's policies lack a clear economic rationale. Its policy foundations were theoretical and unclear due to differing opinions and departmental rivalries whilst dealing with countries with widely varying economic circumstances.

ODI conclusions were that the Fund’s very nature of promoting market-oriented economic approach attracted unavoidable criticism, as LDC governments were likely to object when in a tight corner. Yet, on the other hand, the Fund could provide a ‘scapegoat service’ where governments could take loans as a last resort, whilst blaming international bankers for any economic downfall. The ODI conceded that the fund was to some extent insensitive to political aspirations of LDCs, while its policy conditions were inflexible.^[61]

Argentina, which had been considered by the IMF to be a model country in its compliance to policy proposals by the Bretton Woods institutions, experienced a catastrophic economic crisis in 2001,^[62] which some believe to have been caused by IMF-induced budget restrictions—which undercut the government’s ability to sustain national infrastructure even in crucial areas such as health, education, and security—and privatization of strategically vital national resources.^[63] Others attribute the crisis to Argentina’s misdesigned fiscal federalism, which caused subnational spending to increase rapidly.^[64] The crisis added to widespread hatred of this institution in Argentina and other South American countries, with many blaming the IMF for the region’s economic problems.^[65] The current—as of early 2006—trend toward moderate left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures has been ascribed to this crisis.

In an interview, the former Romanian Prime Minister Călin Popescu-Tăriceanu claimed that "Since 2005, IMF is constantly making mistakes when it appreciates the country's economic performances."^[66]

Support of military dictatorships[link]

The role of the Bretton Woods institutions has been controversial since the late Cold War period, due to claims that the IMF policy makers supported military dictatorships friendly to American and European corporations and other anti-communist regimes. Critics also claim that the IMF is generally apathetic or hostile to their views of human rights, and labor rights. The controversy has helped spark the Anti-globalization movement.

Arguments in favor of the IMF say that economic stability is a precursor to democracy; however, critics highlight various examples in which democratized countries fell after receiving IMF loans.^[67]

Impact on access to food[link]

A number of civil society organizations^[68] have criticized the IMF’s policies for their impact on people’s access to food, particularly in developing countries. In October 2008, former U.S. president Bill Clinton presented a speech to the United Nations World Food Day, which criticized the World Bank and IMF for their policies on food and agriculture:

We need the World Bank, the IMF, all the big foundations, and all the governments to admit that, for 30 years, we all blew it, including me when I was president. We were wrong to believe that food was like some other product in international trade, and we all have to go back to a more responsible and sustainable form of agriculture.

—Former U.S. president Bill Clinton, Speech at United Nations World Food Day, October 16, 2008^[69]

Impact on public health[link]

In 2008 a study by analysts from Cambridge and Yale universities published on the open-access Public Library of Science concluded that strict conditions on the international loans by the IMF resulted in thousands of deaths in Eastern Europe by tuberculosis as public health care had to be weakened. In the 21 countries to which the IMF had given loans, tuberculosis deaths rose by 16.6%.^[70]

In 2009, a book by Rick Rowden titled The Deadly Ideas of Neoliberalism: How the IMF has Undermined Public Health and the Fight Against AIDS, claimed that the IMF’s monetarist approach towards prioritizing price stability (low inflation) and fiscal restraint (low budget deficits) was unnecessarily restrictive and has prevented developing countries from being able to scale up long-term public investment as a percent of GDP in the underlying public health infrastructure. The book claimed the consequences have been chronically underfunded public health systems, leading to dilapidated health infrastructure, inadequate numbers of health personnel, and demoralizing working conditions that have fueled the “push factors” driving the brain drain of nurses migrating from poor countries to rich ones, all of which has undermined public health systems and the fight against HIV/AIDS in developing countries.^[71]

Impact on environment[link]

IMF policies have been repeatedly criticized for making it difficult for indebted countries to avoid ecosystem-damaging projects that generate cash flow, in particular oil, coal, and forest-destroying lumber and agriculture projects. Ecuador for example had to defy IMF advice repeatedly in order to pursue the protection of its rain forests, though paradoxically this need was cited in IMF argument to support that country. The IMF acknowledged this paradox in a March 2010 staff position report ^[72] which proposed the IMF Green Fund, a mechanism to issue special drawing rights directly to pay for climate harm prevention and potentially other ecological protection as pursued generally by other environmental finance.

While the response to these moves was generally positive^[73] possibly because ecological protection and energy and infrastructure transformation are more politically neutral than pressures to change social policy. Some experts voiced concern that the IMF was not representative, and that the IMF proposals to generate only US$200 billion a year by 2020 with the SDRs as seed funds, did not go far enough to undo the general incentive to pursue destructive projects inherent in the world commodity trading and banking systems—criticisms often leveled at the World Trade Organization and large global banking institutions.

In the context of the May 2010 European banking crisis, some observers also noted that Spain and California, two troubled economies within Europe and the United States respectively, and also Germany, the primary and politically most fragile supporter of a euro currency bailout would benefit from IMF recognition of their leadership in green technology, and directly from Green Fund–generated demand for their exports, which might also improve their credit standing with international bankers.^{[citation needed]}

Criticism from free-market advocates[link]

Typically the IMF and its supporters advocate a monetarist approach. As such, adherents of supply-side economics generally find themselves in open disagreement with the IMF.^[who?] The IMF frequently advocates currency devaluation, criticized by proponents of supply-side economics as inflationary.

Currency devaluation is recommended by the IMF to the governments of poor nations with struggling economies. Some economists claim these IMF policies are destructive to economic prosperity.^[74]

In the media[link]

Life and Debt, a documentary film, deals with the IMF's policies' influence on Jamaica and its economy from a critical point of view. Debtocracy, a 2011 independent Greek documentary film, also criticizes the IMF and its tactics for providing financial help to indebted nations.

See also[link]

• African Monetary Fund
• Bank for International Settlements
• Group of Thirty
• World Bank
• Loan
• Conditionality
• Globalization
• Washington Consensus
• Structural Adjustment Program
• International Financial Institution

Notes and references[link]

Notes:

References:

20. http://www.clarin.com/politica/gobierno/FMI-advirtio-sancion-Argentina-mostrar_0_349165280.html

Further reading[link]

• Bordo, M. D. "The Bretton Woods International Monetary System: A Historical Overview", in A Retrospective on the Bretton Woods System, edited by M. D. Bordo and B. Eichengreen. London:1993;
• Boughton, J. M. Silent Revolution: The International Monetary Fund 1979-1989, Washington DC, 2001.
• James, H. "International Monetary Cooperation since Bretton Woods", Oxford, 1996.
• Joicey, N. and Pickford, S. "The International Monetary Fund and Global Economic Cooperation" in Nicholas Bayne and Stephen Woolcock, "The New Economic Diplomacy: Decision-Making and Negotiation in International Relations", (Ashgate Publishing, 2011).
• Keynes, J. M. "The Collected Writings, Vol.XXVI. Activies 1941-1946: Shaping the Post-War World: Bretton Woods and Reparations", Cambridge, 1980.
• Moschella, M. Governing Risk: The IMF and Global Financial Crises (Palgrave Macmillan; 2010).
• Skidelsky, R. "John Maynard Keynes: Fighting for Britain", London, 2000.
• Truman, E. Strengthening IMF Surveillance: A Comprehensive Proposal, Policy Brief 10-29, Peterson Institute for International Economics, 2010.
• Woods, N. "The Globalizers:The IMF, the World Bank, and Their Borrowers", Ithaca, 2006

External links[link]

Wikimedia Commons has media related to: International Monetary Fund

• Official website
• IFIWatchNet (Web resource for analysis and commentary critical of the IMF and similar institutions)
• IMF-Supported Macroeconomic Policies and the World Recession: A Look at Forty-One Borrowing Countries, from the Center for Economic and Policy Research, October 2009
• Proceedings and Documents of the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 1-22, 1944
• IMF and Ukraine found a compromise

Karl Denninger was the CEO of MCSNet in Chicago, one of the area's first Internet providers. He is a founding contributor to conservative blog market-ticker.org and was one of the early members of the Tea Party movement ("I cannot take credit for the idea floated on the forum, but I do like it").^[1] Rick Santelli's CNBC mention of a tea party followed Mr. Denninger's blog entry on January 20.

On January 20, 2009 Denninger published a blog post regarding the suggestion to mail tea-bags to the White House and Congress. The title of his post was "Tea Party February 1st?" It was written on the same day and in response to President Obama's inauguration,^[2] even though Denninger had voted for Obama.^[3] The blog-post took issue with the bank bailouts, the US national debt and "the fraud and abuse in our banking and financial system" which included the predatory lending practices at the center of the home mortgage foreclosure crisis.^[4]

Denninger, who helped form FedUpUSA in the wake of the March 2008 Federal Reserve bail-out of Bear Sterns, has been a guest on MSNBC, Glenn Beck and CNBC Reports.^[5][6] By February 1, the idea had spread to various conservative and libertarian-oriented blogs, forums, websites and through a viral email campaign.^[7]

On Oct 20, 2010, he blogged that Republicans had hijacked the Tea Party movement, and perverted its original goals to the standard Republican concerns of "guns, gays and God.".^[8]

Denninger stated on Russia Today that he supports the Occupy Wall Street movement.^[9]

Books[link]

• Leverage: How Cheap Money Will Destroy the World, November 2011, ISBN 978-1-118-12284-6 1

References[link]

External links[link]

• Market-ticker, Denninger's financially-focused blog

The Edge
Background information
Birth name	David Howell Evans
Born	(1961-08-08) 8 August 1961 (age 50) Barking, Essex, England, United Kingdom
Origin	County Dublin, Ireland
Genres	Rock, post-punk, alternative rock
Occupations	Musician, songwriter, activist
Instruments	Guitar, vocals, keyboards, piano, bass guitar
Years active	1976–present
Labels	Island, Mercury
Associated acts	U2, Passengers
Website	www.u2.com
Notable instruments
Gibson Explorer Fender Stratocaster Gibson Les Paul Fender Telecaster Gretsch Country Gentleman Gretsch White Falcon Rickenbacker 330/12

David Howell Evans (born 8 August 1961), more widely known by his stage name The Edge (or just Edge),^[1] is a musician best known as the guitarist, backing vocalist, and keyboardist of the Irish rock band U2. A member of the group since its inception, he has recorded 12 studio albums with the band and has released one solo record. As a guitarist, The Edge has crafted a minimalistic and textural style of playing. His use of a rhythmic delay effect yields a distinctive ambient, chiming sound that has become a signature of U2's music.

The Edge was born in England to a Welsh family, but was raised in Ireland after moving there as an infant. In 1976, at Mount Temple Comprehensive School, he formed U2 with his fellow students and his older brother Dik. Inspired by the ethos of punk rock and its basic arrangements, the group began to write its own material. They eventually became one of the most popular acts in popular music, with successful albums such as 1987's The Joshua Tree and 1991's Achtung Baby. Over the years, The Edge has experimented with various guitar effects and introduced influences from several genres of music into his own style, including American roots music, industrial music, and alternative rock. With U2, The Edge has also played keyboards, co-produced their 1993 record Zooropa, and occasionally contributed lyrics. The Edge met his second and current wife, Morleigh Steinberg, through her collaborations with the band.

As a member of U2 and as an individual, The Edge has campaigned for human rights and philanthropic causes. He co-founded Music Rising, a charity to support musicians affected by Hurricane Katrina. He has collaborated with U2 bandmate Bono on several projects, including songs for Roy Orbison and Tina Turner, and the soundtracks to the musical Spider-Man: Turn Off the Dark and the Royal Shakespeare Company's London stage adaptation of A Clockwork Orange. In 2011, Rolling Stone magazine placed him at number 38 on its list of "The 100 Greatest Guitarists of All Time".

Personal life[link]

The Edge at a U2 concert in Anaheim (2005)

David Howell Evans was born at the Barking Maternity Hospital,^[2] Essex, England to Welsh parents Garvin and Gwenda Evans.^[1] When he was one, his family moved to County Dublin, Ireland where he attended St Andrew's National School. He received piano and guitar lessons and often performed with his brother Dik Evans before they both answered an advertisement posted by Larry Mullen, Jr. at their school, Mount Temple Comprehensive School, seeking musicians to form a band.^[3] The band accepted both of them. This band went through several incarnations before emerging as U2 in March 1978 (Dik Evans left the band just before the name change).^[3] U2 began performing in various venues in Ireland and eventually began developing a following. Their debut album, Boy, was released in 1980.

In 1981, leading up to the October tour, Evans came very close to leaving U2 for religious reasons, but he decided to stay.^[3] During this period, he became involved with a group called Shalom Tigers, in which bandmates Bono and Larry Mullen Jr. were also involved.^[4] Shortly after deciding to remain with the band, he wrote a piece of music that later became "Sunday Bloody Sunday".^[3] The Edge married his high school girlfriend Aislinn O'Sullivan on 12 July 1983.^[5] The couple had three daughters together: Hollie in 1984, Arran in 1985 and Blue Angel in 1989.^[4] The couple separated in 1990, but were unable to get officially divorced because of Irish laws regarding marriage annulment; divorce was legalised in 1995 and the couple were legally divorced in 1996.^[4]

In 1993, The Edge began dating Morleigh Steinberg, a professional dancer and choreographer employed by the band as a belly dancer during the Zoo TV Tour. They had a daughter, Sian (born 1997), and a son, Levi (born 25 October 1999),^[4] before marrying on 22 June 2002.^[4] He appeared in the 2009 music documentary film It Might Get Loud.^[6] The Edge has been criticized for his efforts to build five luxury mansions on a 156 acre plot of land in Malibu, California.^[7] The California Coastal Commission voted 8-4 against the plans, with the project described by the commission's executive director, Peter Douglas, as "In 38 years...one of the three worst projects that I've seen in terms of environmental devastation...It's a contradiction in terms – you can't be serious about being an environmentalist and pick this location."^[7] The Santa Monica Mountains Conservancy agreed to remain neutral on the issue following a $1 million donation from The Edge and a commitment from The Edge to designate 100 acres of the land as open space for public footpaths.^[7]

Music style[link]

Guitar playing[link]

As a guitar player, The Edge has a sound typified by a low-key playing style, a chiming, shimmering sound (thanks in part to the sound of VOX AC-30s) that he achieves with extensive use of delay effects and reverb. The feedback delay is often set to a dotted eighth note (3/16 of a measure), and the feedback gain is adjusted until a note played repeats two or three times.^{[citation needed]}

On 1987's The Joshua Tree, The Edge often contributes just a few simple lead lines given depth and richness by an ever-present delay. For example, the introduction to "Where the Streets Have No Name" is simply a repeated six-note arpeggio, broadened by a modulated delay effect. The Edge has said that he views musical notes as "expensive", in that he prefers to play as few notes as possible. He said in 1982 of his style,

"I like a nice ringing sound on guitar, and most of my chords I find two strings and make them ring the same note, so it's almost like a 12-string sound. So for E I might play a B, E, E and B and make it ring. It works very well with the Gibson Explorer. It's funny because the bass end of the Explorer was so awful that I used to stay away from the low strings, and a lot of the chords I played were very trebly, on the first four, or even three strings. I discovered that through using this one area of the fretboard I was developing a very stylized way of doing something that someone else would play in a normal way."^[9]

Many different influences have shaped The Edge's guitar technique.^{[citation needed]} His first guitar was an old acoustic guitar that his mother bought him at a local flea market for only a few pounds; he was nine at the time. He and his brother Dik Evans both experimented with this instrument.^[9] He said in 1982 of this early experimentation, "I suppose the first link in the chain was a visit to the local jumble sale where I purchased a guitar for a pound. That was my first instrument. It was an acoustic guitar and me and my elder brother Dik both played it, plonking away, all very rudimentary stuff, open chords and all that."^[9] The Edge has stated that many of his guitar parts are based around guitar effects. This is especially true from the Achtung Baby era onwards, although much of the band's 1980s material made heavy use of echos.

Vocals[link]

The Edge in June 2005

The Edge also supplies the backing vocals for U2. U2's 1983 live album and video release, Under a Blood Red Sky and Live at Red Rocks: Under a Blood Red Sky are good reference points for his singing (as are the live DVDs from the Elevation Tour, U2 Go Home: Live from Slane Castle and Elevation 2001: Live from Boston). For example, he sings the chorus to "Sunday Bloody Sunday" (Bono harmonizes on the final 'Sunday'). U2 used this tradeoff technique later in "Bullet the Blue Sky" as well. His backing vocals are sometimes in the form of a repeated cry; examples of songs that use this approach include "Beautiful Day", "New Year's Day" and "Stay (Faraway, So Close!)". Another technique he uses in his backing vocals is the falsetto, in songs such as "Stuck in a Moment You Can't Get Out Of", "Sometimes You Can't Make It on Your Own", "A Man and a Woman", "The Wanderer", live versions of "The Fly", and "Window in the Skies".

The Edge sings the lead vocal on "Van Diemen's Land" and "Numb", the first half of the song "Seconds", dual vocals with Bono in "Discotheque", and the bridge in the song "Miracle Drug".^[4] He also sings the occasional lead vocal in live renditions of other songs (such as "Sunday Bloody Sunday" during the PopMart Tour and "Party Girl" during the Rotterdam Zoo TV show when it was Bono's birthday).^[10] He also plays a solo acoustic version of the song "Love is Blindness" that is featured in the documentary film From the Sky Down.

Other instruments[link]

He has played piano and keyboards on many of the band's songs, including "I Fall Down", "October", "So Cruel", "New Year's Day", "Running to Stand Still", "Miss Sarajevo", "The Hands that Built America", and "Original of the Species" and others. He plays the organ on "Please". In live versions of "New Year's Day", "The Unforgettable Fire", "Your Blue Room", and "Moment of Surrender", he plays both the piano and guitar parts alternately. In most live versions of "Original of the Species," piano is the only instrument played during the song. Although The Edge is the band's lead guitarist, he occasionally plays bass guitar, including the live performances of the song "40" where The Edge and bassist Adam Clayton switch instruments.

Solo recordings[link]

In addition to his regular role within U2, The Edge has also recorded with such artists as Johnny Cash, B. B. King, Tina Turner, Ronnie Wood, Jay-Z, and Rihanna. The Edge connected with Brian Eno and Lanois collaborator Michael Brook (the creator of the infinite guitar, which he regularly uses), working with him on the score to the film Captive (1986). From this soundtrack the song "Heroine", the vocal of which was sung by a young Sinéad O'Connor was released as a single.

He also created the theme song for season one and two of The Batman. He and fellow U2 member, Bono, wrote the lyrics to the theme of the 1995 James Bond film GoldenEye. The Edge, along with bandmate Bono, recently composed a musical adaptation of Spider-Man. On May 25, 2011, a single titled Rise Above 1: Reeve Carney Featuring Bono and The Edge was released digitally.^[11] The music video was released on July 28, 2011.^[12]

Musical equipment[link]

Edge's 1964 Vox AC30 on stage in Foxborough for the U2 360° Tour.

The Edge plays electric guitar, acoustic guitar, keyboards, piano, bass guitar (on "40" and "Race Against Time") and lap steel guitar. Compared to many lead guitarists, The Edge is known for using many more guitars during a show. According to his guitar tech Dallas Schoo, a typical lead guitarist uses four or five different guitars in one night, whereas The Edge takes 45 on the road, and uses 17 to 19 in one 2.5-hour concert. He is estimated to have more than 200 guitars in the studio.^{[citation needed]}

Philanthropy[link]

In 2005, The Edge along with Bob Ezrin and Henry Juszkiewicz co-founded Music Rising, a charity that helped provide replacement instruments for those that were lost in Hurricane Katrina. The instruments were originally only replaced for professional musicians but they soon realized the community churches and schools needed instruments as well. The charity's slogan is "Rebuilding the Gulf Region note by note" and has so far helped over a hundred musicians who were affected by Hurricane Katrina. The Edge also serves on the board of the Angiogenesis Foundation, a 501(c)(3) nonprofit organization dedicated to improving global health by advancing angiogenesis-based medicine, diets, and lifestyle.^[13]

See also[link]

• Timeline of U2
• List of people on stamps of Ireland

References[link]

Footnotes