IMF and Good Governance - Essay Example

What is IMF The IMF was created in 1944 to solve any imbalances that may prevail in a country's economy and therefore to stabilize it. This was the era of the gold standard and the IMF provided support to countries in need of assistance in this regard. According to the official site of IMF, this organization was created to, "It was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment." (http://www.imf.org/external/about.htm). Though the gold standard has not been in use since 1971 the IMF is still an integral part of public administration and policy. At the moment the IMF has 184 member countries (Welch 2001). IMF and Good Governance Good governance is a set of principles that have been adopted by both the World Bank and the IMF to guide them and help them to achieve their objectives and goals in their member countries. The current scenario is that these organizations now are in the process of applying similar standards as the, good governance techniques to various other aspects of the institution, such as transparency and accountability. Other facets include fairness, impartiality, efficiency and ownership (Woods 2000). Though IMF itself is a vast topic, I would like to target solely the governance aspect of the organization. Only good and sound governance of an organization can result in the complete and adequate implementation of its policies. According to Beke (2002) the underlying rationale for governance in IMF is to eliminate corruption and to encourage transparency as well as accountability in all economic policies and issues of any given country. Since, 1997 the IMF has introduced methods to look after the resources of the organization so as to prevent laundering of monetary funds. In addition, means are also taken to track all sorts of expenditures specifically those on poverty related issues. Therefore, governance is required in all phases. Be it the way the money is lent or discharged to a country, in the implementation of certain economy related policies, or be it in within the IMF itself. Therefore, I would like to research all three of these aspects of governance in my study. There are practical reasons behind the adoption of the good governance criteria by the IMF. One of the foremost according to Woods (2000) is ownership and participation. The reason behind them is that these two means will increase the efficiency and effectiveness of IMF. It has also been stated that in the past any unpopular or unjust act of a country's government was blamed on IMF. Therefore, these policies also enhance the image of the government by stating that there is no imposition by the IMF upon any country to adopt its policy. Any country that does to take the advice of the IMF and follow its policies and guidelines does so of it's own accord. In the past, the IMF consisted of an enclosed group of policy makers, however, in recent years due to its good governance criteria the organization has opened-up. This induces the concept of transparency. The reason behind this is that when an organization in enclosed (in the form of financial institutions and governments only), transparency is difficult; thus, corruption prevails. In such a scenario bribery takes place and the government can easily deceive its citizens by putting the blame for economic upheaval on an institution such as the IMF. In order to prevent such dire situations from arising it is imperative that good governance policies (especially those that include transparency procedures and processes) are included. Research Methodology The research methodology will such that the background and scope of the paper will be given. The basic scope of this paper is that it will help future policy makers as well as researchers to further their studies. In the practical sense this project aims to give recommendations at the end that will provide practical steps to help enhance the governance processes of IMF. Thus, if implemented these will prove to be supportive and accommodating to the best interest of the organization. The main objective of the study is research upon the background of IMF and on that analyzes the present situation of the study. In the research study, I plan to study the past as well as the present scenario of the IMF. The basis upon which the IMF initially adopted the good governance policies are to be studied, as well as the future role that these policies are likely to play. I plan to study the pros and cons of these policies. As this is a student project, one of the main limitations will be the time constraints as well as the lack of monetary resources available to conduct a large-scale research study on such a vast subject matter. Literature from various sources (such as research journals, magazines, books, articles etc.) will be used. The research question is "Why does the IMF use Good Governance as one of the criterion for her policy and what are the consequences" This is the basic question that I aim to answer in my research report. However, I would like to break these down into shorter questions, such that they will be more feasible for myself as well as the future readers of this paper to comprehend. They are as follows; What are the bases for the good governance policy How did it come into being What are the benchmarks for the good governance policy of the IMF To what extent has the good governance policy impacted the internal and external environment of the IMF Should such a policy be adopted by other international organizations/companies How can corruption and transparency be eliminated through the good governance policies It should be noted that only when the above points will be answered will this particular study be completed. Various data will be collected for this project. This will be done through primary as well as secondary resources. Primary resources are those such as surveys. Whereas, secondary resources consist of journal articles and other previously published research material (through authentic sources). This is also the means through which the literature review will be formulated. The data that has been gathered from the questionnaire (or survey) form will need to be analyzed, examined and investigated. This will be done with the help of statistical methods and techniques. Data analysis software, in the form of SPSS software will also be used. Afterwards, the conclusions that have been derived from the above methods will be given. This portion will simply give the finding of the research study. At the very end the recommendations are given. This will help future researches to find out what the further prospects for researches in the given field are. In accordance to the abovementioned criteria the researcher will define a project timeline, in order to complete the project on time. Works Cited About the International Monetary Fund, IMF, Introductory Information http://www.imf.org/external/about.htm Accessed June 19, 2006 Beke, Anton Op (2002) "IMF Activities to Promote Good Governance and Combat Corruption---An Overview" IMF, Policy Development and Review Department IMF -- International Monetary Fund Home Page http://www.imf.org/ Accessed June 19, 2006 Welch, C. (2001) "The IMF and Good Governance" Friends of the Earth Vol. 5:13. Woods, N. (2000) "The Challenges of Good Governance for the IMF and the World Bank" World Development Vol. 28 No. 5 Read More