The IMF fails again.

(From The Korea Herald)

It is six years since the IMF's fateful meeting in Hong Kong, just before the global financial crisis. I was there. What a peculiar meeting it was. It was clear that a crisis loomed. Capital market liberalization was the culprit, exposing countries to the vagaries of international capital flows - to both irrational pessimism and optimism, not to mention the manipulation of speculators. Yet the IMF was still lobbying to change its charter in order to force countries to liberalize their capital markets, ignoring the evidence that this did not lead to enhanced growth or more investment, but only to more instability. The crises that erupted later that year undermined confidence in the IMF and led to discussions about "reforming the global financial architecture." Now six years later, we can say that those discussions did not lead to much real change. Some suggest that the fancy term "reforming the global financial architecture" was a dead giveaway. The U.S. Treasury and the IMF knew, or at least hoped, that with the passing of the crisis, global attention would turn elsewhere. While wrong about what to do in the crisis, on this point they were right. Today the IMF is more aware of the impact its programs have on poverty - though it still does not produce a "poverty and unemployment impact" statement when it presents a program. The Fund has recognized the importance of participation and ownership. No longer are programs simply a matter between the IMF, central bank governors, and finance ministers. After criticizing the East Asian countries for lack of transparency, the IMF acknowledged that it, too, was insufficiently transparent, and made reforms.

Unfortunately, it still has not recognized a basic principle underlying modern democracy: citizens' right to know. After the failure of the Argentina bail out, the IMF recognized the need for an alternative approach.Unfortunately, it did not ...