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Abstract
Increasing integration has made the great challenge of reducing poverty and
advancing human development more achievable than ever, and more
dependent than ever on good global economic governance. In this paper I set
out the economic logic for why good global economic governance matters for
reducing poverty and inequality in the world, and then develop several
arguments for how better representation of developing countries in the IMF, the
World Bank, and other multilateral institutions would make those institutions more
effective in that task. The arguments include the long-run viability of new financing
of the institutions, and their effectiveness in managing the political economy
challenges of using conditionality. To illustrate the possible link between better
representation and effectiveness, I discuss the example of the Inter-American
Development Bank, where the developing country borrowers control 50 percent
of the votes and the Presidency. I close with a discussion of the dilemma of
reconciling the need for sustaining the financial and political support of the rich
country members of these global institutions, with stronger poor country
representation to ensure their long-run legitimacy and effectiveness.
Footnote:
* Previously titled, “Global Economic Governance and Representation of Developing Countries: Some Issues and the IDB Example”
This paper is based on remarks originally presented at the Commonwealth Secretariat Conference in
London on July 3, 2002, and revised for a conference on reform of the International Monetary Fund and
the World Bank at Yale University in April 2003. This paper is forthcoming the World Bank/Yale
conference proceedings. I am grateful to Euric Bobb for his help in clarifying issues regarding the Inter-
American Development Bank, and to James Adams, Ariel Buira, William Cline, Kemal Dervis, T.N.
Srinivasan, Sandip Sukhtankar, Ngaire Woods and John Williamson for their comments on earlier
versions.
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