Abstract
The most recent IMF LIDC reform is tied to the fallout from the 2008 global financial crisis. This chapter first traces how the crisis delegitimized a conservative macroeconomic framework deeply embedded in IMF ‘common sense’. The chapter also uncovers evidence that global elites see the IMF and other multilateral institutions as important vectors to rebuild and maintain broad-based support of globalizing capitalism. This is expressed partially in how the IMF now interfaces with LIDC stakeholders. The chapter also shows that the 2010 reform is tied to the growing strength of a ‘developmentalist’ bloc within the IMF. The 2008 crisis strengthened the hand of the managing director, UK, and France relative to that of the USA and those who advocate for less involvement in development issues.
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Notes
- 1.
1. IMF Official Website, IMF Factsheet: IMF Support for Low Income Countries, http://www.imf.org/external/np/exr/facts/poor.htm, date accessed 19 June 2015.
- 2.
2. Author interview with Fund staff member from the SPR department, Washington, DC, September 2011.
- 3.
3. A prominent exception to the rule here is Joseph Stiglitz who advocates for a more traditional Keynesian position.
- 4.
4. Inflation targeting involves central banks setting low rates of inflation and then abiding by them. New Zealand was the first country to adopt inflation targeting in 1989. As of 2010, 26 countries used inflation targeting. See Rodger (2010).
- 5.
5. Author interview with Fund staff member from the African department, Washington, DC, June 2011.
- 6.
6. In 2005, the G-8 proposed that the IMF, IDA, and the African Development Fund cancel 100 % of the debt claims of states that had reached HIPC completion points. Under MDRI, the Fund formed two trusts (MDRI-I and MDRI-II) to pay off the full stock of debt owed to the IMF for loans disbursed prior to 2005. States with per capita income of US$380 a year or less receive debt relief financed by the Fund’s own resources through the MDRI-I. LIDCs with per capita income above US$380 receive funds from bilateral creditors administered by the Fund through the MDRI-II. As of 2010, US$3.4 billion in debt relief was granted to 32 LIDCs who had reached HIPC completion points.
- 7.
7. Author interview with Fund staff member from the SPR department, Washington, DC, June 2011.
- 8.
8. Author interview with Fund staff member from the African department, Washington, DC, June 2011.
- 9.
9. Author interview with Fund staff member from the African department, Washington, DC, June 2011.
- 10.
10. Author interview with Fund staff member from the SPR department, Washington, DC, June 2011.
- 11.
11. Author interview with Fund staff member from the SPR department, Washington, DC, June 2011.
- 12.
12. Author interview with Fund staff member from the African Department, Washington, DC, June 2011.
- 13.
13. Author interview with Executive board director, Washington, DC, January 2012.
- 14.
14. Author interview with Fund staff member from the SPR department, Washington, DC, June 2011.
- 15.
15. Author interview with Fund staff member from the SPR department, Washington, DC, September 2011.
- 16.
16. Author interview with Fund staff member from the SPR department, Washington, DC, September 2011.
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Hibben, M. (2016). Deepening the IMF’s Development Model: The ECF, RCF, and SCF Reform. In: Poor States, Power and the Politics of IMF Reform. International Political Economy Series. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-57750-4_6
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