Political Aspects Of Managing The International Monetary System

I HAVE been asked to talk about the political aspects of the management of the international monetary system. I will not, however, be talking about political problems as such, but only about how one can try to handle them. What we call the international monetary system is of course the monetary relationships between those countries which have accepted multinational obligations and responsibilities, which means in fact the members of the International Monetary Fund. The problems involved are of course of a highly political nature. The balance of payments and exchange rates affect the whole economic and social life of a country. The domestic policies which have to be pursued in order to achieve certain objectives are at the core of each country's political life, and I might add that in my experience there is no field where governments at present attach so much importance to sovereignty as the monetary field, be it only because of its economic and social repercussions. In my opinion, it is easier to belong to Nato and to fulfil one's obligations to Nato than to belong to the IMF and fulfil one's obligations to the IMF, because it affects people much more directly. T!herefore the question is: How can the Fund exerci,se its jurisdictional and regulatory powers and decide about access to its resources-which is sometimes quite important-without running into insuperable political difficulties? On the other hand, how can countries co-operate within and with the Fund without feeling that they have to give up too many of their sovereign rights? We must first look at the problem within the Fund-how it manages to operate; and then from the point of view of the Fund's relations with outside bodies-how it can manage the negotiations and discussions which will, one hopes, lead to a reform of the international monetary system. Filrst, within the Fund. In my opinion it is nothing short of a miracle that 127 countries, of all sizes, at all possible stages of development, with different political and social regimes and philosophies, can co-operate. Of course, in order to carry out or to implement policies, the Fund itself has to stay out of politics. But there is still the problem of how to accommodate the individual members

Economics · Political economy · Political science · Politics · Global Financial Crisis and Policies · International Development and Aid · Law

• The Doctrine of Economic Neutrality of the IMF and the World Bank

  Open Access•Richard Swedberg•Journal of Peace Research•1986

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