The IMF in IO Survival

Team Members: L. Bradley, S. Corbin and H. Willerson*

*Note: The team members contributed equally and are listed in alphabetical order.

Blog Post

Voting Inequality in the IMF

What is the IMF? 

Founded in 1944 by 44 allied nations, the International Monetary Fund (IMF) is an international organization formed to pursue economic globalization to support the avoidance of the mistakes that fostered the Great Depression and World War II (IMF 2022).  While the IMF has shifted goals and priorities over the past many decades, today, the IMF works to bring about prosperity and sustainable development for its member countries by providing them with advice and financial assistance in times of need. The IMF now consists of 190 member countries that work with each other and other international bodies to carry out their mission of providing growth and prosperity for all (IMF 2022).

Since 1944, the IMF has seen a great deal of change. They have expanded membership and the goals of the organization, and they have also reformed their economic policies numerous times (IMF 2022). Most currently, the IMF has published initiatives toward less ambiguity when it comes to its functioning (IMF 2022). However, despite the many changes and valiant efforts they have made to better the organization, it still struggles to address voting inequality among members (Mohseni-Cheraghlou 2022).

What do we propose?

We propose that a double majority system be implemented in the IMF's voting system. The double majority system calls for a majority of votes in two different criteria: shareholder majority and one-state-one-vote or population majority (Mohseni-Cheraghlou 2022). In every voting process, there would need to be a majority (about 50%) vote for BOTH criteria. By implementing a double majority voting system, members are given a more equal opportunity to vote and give input towards decisions. Furthermore, this voting process would eliminate a single country's ability to veto. 

There is empirical evidence in Australia that supports a double-majority system. For example, in order for a Constitutional change to be passed in Australia, it must receive a national majority and a majority of voters in 4 of 6 states (Australian Electoral Commission 2018). This process helps prevent a small group from controlling outcomes, which is our goal for the IMF's voting system. 

Empirical evidence can also be found in Switzerland. In Switzerland, also to pass a constitutional amendment, a double majority must be achieved (Federal Chancellery 2022). The double majority system in Switzerland, similar to Australia, works to ensure that more weight is given to smaller cantons. 

Both examples within Australia and Switzerland empirically display that a double majority system allows and ensures that minority voices are heard in the decision-making process. Through this specific voting process, a partial amount of power would be taken out of the hands of countries with the greatest economic contributions to the global economy and placed into the hands of countries with developing and smaller economies. By doing so, more countries within the IMF will be willing to participate in the international organization. The implementation of the double majority voting system in the IMF carries the ability to strengthen the IMF’s legitimacy on the world stage and ensure its survival as an alive, progress-making international organization. 

Bibliography 

Australian Electoral Commission. 2018. “Double Majority - Australian Electoral Commission.” Australian Electoral Commission. https://education.aec.gov.au/teacher-resources/files/referendum-2-double-majority.pdf

Federal Chancellery. 2022. “Popular Majority and Majority of the Cantons.” Abstimmungen: Nötige Mehrheit für die Annahme einer Vorlage. https://www.ch.ch/en/votes-and-elections/votes/popular-majority-and-majority-of-the-cantons/ (October 4, 2022). 

International Monetary Fund. 2022. “How the IMF makes decisions.” IMF. Available at: https://www.imf.org/en/About/Factsheets/Sheets/2022/How-the-IMF-makes-decisions (Accessed: October 11, 2022).

International Monetary Fund. 2022. “IMF members' quotas and voting power, and IMF Board of governors.” IMF. Available at: https://www.imf.org/en/About/executive-board/members-quotas (Accessed: October 11, 2022). (October 5, 2022).

International Monetary Fund. 2022. “What Is the IMF?” IMF. https://www.imf.org/en/About/Factsheets/IMF-at-a-Glance (October 4, 2022). 

Mohseni-Cheraghlou, Amin. 2022. “Democratic Challenges at Bretton Woods Institutions.” Atlantic Council. https://www.atlanticcouncil.org/blogs/econographics/inequality-at-the-top-democratic-challenges-at-bretton-woods-institutions/ (October 4, 2022). 

Mohseni-Cheraghlou, Amin. 2022. “‘Inequality Starts at the Top’: Voting Reforms in Bretton Woods Institutions.”Atlantic Council. https://www.atlanticcouncil.org/blogs/econographics/inequality-starts-at-the-top-voting-reforms-in-bretton-woods-institutions/ (October 4, 2022).