• What is the G8?

What is the G8?

This paper has focused on steps the G8 governments have taken to adapt the role of the IMF. Given the criticism levelled at the IMF by Republican parliamentarians it has particularly examined statements from the US administration, with a view to try to understand how this powerful force within the IMF might try to shape it.

The article concludes that:

• the IMF’s role is being moulded by the G8 to address problems in two very different contexts: 1) crisis prevention in middle-income countries; and 2) poverty reduction and development in the poorest countries
• recent reform efforts have mostly focused on the former function. However, tools to deal with problems arising from financial liberalisation in the poorest countries have been neglected as these countries are not considered to be systemically important to the stability of the international economy by the G7 governments
• little effort has been made to equip the IMF with more tools to address this new objective. Instead, the approach has been to rely on increased collaboration with the World Bank
• collaboration between the IMF will have ambiguous effects
• the IMF probably should not be funding poverty reduction programmes it should be doing more to seek views and advice from those who are experts on poverty reduction so that it is better able to understand what impact its macroeconomic policies have on households
• as joint working arrangements between the Bank and Fund start to become more common place Strategies), it raises the question again as to whether the two institutions ought to be formally merged. While this may be a logical conclusion it is not yet on the G7 or others’ agenda. For the time-being, it will continue to be a process of merger by stealth

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