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I. INTRODUCTION Recent years have witnessed an intensified discussion on the need for changes in global economic governance. The discussion has partly been motivated by the stalemate in governance reforms in the International Monetary Fund (IMF), which have been held up despite their approval by its Board of Governors in 2010. The US has 17.7 per cent of quota share (and 16.7 percent of vote share) in the IMF and hence an effective veto over important decisions that require a super majority of 85 per cent of votes. The reforms cannot go ahead because of the inability of the US administration to obtain approval from the US Congress for the reforms. This is ironic since the United States was the principal architect of the 2010 agreement (Truman, 2015), which essentially proposed to marginally reduce the quota shares of European countries in favor of dynamic emerging and developing economies (EDEs). The argument for IMF’s governance structure to evolve along with the world economy had been made repeatedly by US Treasury officials since at least 2005, if not earlier (Snow, 2005; Adams, 2005). Ever since the founding of the IMF such quota reviews are mandated to be undertaken at intervals not exceeding five years. They have, until now, indeed been implemented on a relatively regular basis. As we detail later in this paper, the process has, in general, not been smooth. The advanced economies (AEs) have often resisted the proposed increases in overall IMF quota resources; and it has seldom been easy for US administrations to obtain Congressional approval. Approvals for significant overall expansion for IMF quota resources have usually come under the pressure of international economic and financial crises, or the application of unusual pressure from the IMF management and the rest of its membership. The current delay, now approaching 5 years, is unprecedented, particularly in view of the still fragile nature of the global economy, and IMF’s potential need for resources in the light of sovereign debt and other stresses arising from the North Atlantic Financial Crisis (NAFC).
Access and download the full IMF working paper at: http://www.imf.org/external/pubs/ft/wp/2015/wp15219.pdf