International Monetary Fund fails

July 17, 2001

Free Market Foundation

In testimony before the U.S. Senate Committee on Foreign Relations, Prof. Charles Calomiris, of the Columbia University Graduate School of Business, noted that the International Monetary Fund (IMF) has failed to fulfil its purposes. He argued that:

The IMF rarely succeeds in enforcing lending conditions.

There is no positive effect on economic activity for nations receiving IMF assistance.

IMF assistance helps transfer wealth from the people to cronies of the government, encourages reckless domestic lending policies, strengthens the influence of the cronies, and encourages higher taxes in lieu of expenditure cuts thus harming local economies.

Economically sane policies take a back seat to U.S. foreign policy objectives.

The entire testimony of Professor Calomiris can be found at:
http://www.aei.org/ct/ctcalomiris.htm

FMF\10 July 2001