© 2000 by Oxford University Press
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The international monetary fund in historical perspective
Centre for Commercial Law Studies, Queen Mary and Westfield College, University of London, Mile End Road, London E1 4NS, UK E-mail: r.lastra@qmw.ac.uk
The International Monetary Fund was set up in 1944 in a context of war, with the memories of hyperinflation, depression, and fluctuating exchange rates still fresh. The institution - though never exempt from criticism - has arguably served the international community well over the years, demonstrating a tremendous ability to adjust to new economic circumstances. Despite the abandonment of the par value regime in the 1970s, the importance of the IMF has remained undiminished. The IMF played a leading role in the sovereign debt restructuring of the LDC countries in the 1980s, in the transition to a market economy of formerly communist countries in the early 1990s, and in the resolution of financial crises in Mexico and Asia in the mid- to late 1990s, though its handling of such crises has been the subject of much controversy. This paper provides a historical primer on the IMF and considers some of the challenges the institution faces as we enter the twenty-first century. In particular, it questions the wisdom of granting the IMF a formal international lender of last resort role; it suggests that surveillance be extended beyond macro-economic policies to [micro] prudential financial supervision; and surveys the evolution and 'relaxation' of conditionality over the years.