The Globalization Reader, 5th Edition

33 The International Monetary Fund

James Vreeland

At the writing of this book, 49 developing countries around the world – whose populations account for more than one billion people – are participating in economic programs supported by the International Monetary Fund (IMF or Fund). These “IMF programs” grant the governments of these countries access to IMF loans, but access to the loans can be cut off if the governments fail to comply with specific policy conditions. IMF policy conditions impact the lives of individuals living in these countries in intimate ways: the policy conditions address government expenditures, so IMF programs help determine whether roads, schools, or debt repayment take priority. The policy conditions also address interest rates, so they may affect one's ability to borrow to purchase a home or invest in a business. IMF policy conditions often address the value of the national currency, so IMF programs may impact the very purchasing power of the money in people's pockets.

Not surprisingly, the IMF is well known throughout the developing world – to the elites and the masses alike. The organization often appears to exercise as much or even more authority than their own governments. Yet, the IMF is less familiar to average citizens in the developed world. And, to many throughout the world, the actual functioning of the organization is unknown or misunderstood. Unfounded opinion about the IMF abounds among people who often lump it together with other ...