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Legitimacy Gaps in the World Economy: Explaining the Sources of the IMF's Legitimacy Crisis

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Abstract

Since the Asian financial crisis of 1997–1998, the International Monetary Fund (the Fund) has been embroiled in an international crisis of legitimacy. Assertions of a crisis are premised on the notions that the Fund's voting system is unfair, that the Fund enforces homogeneous policies onto borrowing member states and that loan programmes tend to fail. Seen this way, poor institutional and policy design has led to a loss of legitimacy. But institutionalised inequalities or policy failure is not in itself sufficient to constitute an international crisis of legitimacy. This article provides a conceptually-driven discussion of the sources of the Fund's international crisis of legitimacy by investigating how its formal ‘foreground’ institutional relations with its member states have become strained, and how informal ‘background’ political and economic relationships are expanding in a way that the Fund will find difficult to re-legitimate. The difference between the Fund's claims to legitimacy and how its member states, especially borrowers, act has led to the creation of a ‘legitimacy gap’ that is difficult to close. However, identifying the sources of the Fund's international crisis of legitimacy allows us to explore what avenues are available to resolve the crisis.

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Notes

  1. 3 Of course it is necessary to specify, case by case, when the failure to implement policy is not due to a lack of belief but due to technical or financial capacities. While in the past the Fund concentrated on building administrative, technical, and financial capacities, its recent shift to stressing ‘political will’ and ‘transparency’ in member states points to a legitimation problem rather than to a ‘know-how’ or resources problem.

  2. 4 As commented to me in an interview with a Fund staff member in Washington, DC, August 2005.

  3. 5 Interview with staff member of Fiscal Affairs Department, IMF, in Washington, DC, August 2005.

  4. 6 ‘IMF Board of Governors Approves Quota and Related Governance Reforms’, IMF Press Release No. 6/205, September 18, 2006, www.imf.org/external/np/sec/pr/2006/pr06205.htm.

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Authors and Affiliations

  1. International Center for Business and Politics, Copenhagen Business School, Steen Blichers Vej 22, Frederiksberg, 2000, Denmark

    Leonard Seabrooke

  2. Department of International Relations, Research School of Pacific and Asian Studies, The Australian National University, ACT, 0200, Australia

    Leonard Seabrooke

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  1. Leonard Seabrooke
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This article was drafted while a visitor at the Norwegian Institute of International Affairs (NUPI), Oslo. It was then revised during a visit to the Center for the Advanced Study of the Behavioral Sciences (CASBS), Stanford University. My thanks go to all of the participants in this symposium, as well as to Mick Cox, for their feedback on earlier versions of this piece at both the Canberra 2005 and Bellagio 2006 workshops. My thanks also go to Jacquie Best, Anna Persson, Ole Jacob Sending, Shogo Suzuki, and Antje Vetterlein for their conversations and comments on earlier drafts. My special thanks go to André Broome for his extensive comments on earlier drafts. My thanks also go to the archivists in the International Monetary Fund Archives, Washington, DC, especially Madonna Gaudette, Premela Isaacs, and Jean Marcouyeux.

2 The hunch on templates is drawn from a broader study of the Fund and tax policy advice to 20 states between 1965 and 2000. In the broader study, the states are: Indonesia, South Korea, the Philippines, Thailand, Romania, Yugoslavia, Turkey, Argentina, Bolivia, Chile, Ecuador, Mexico, Morocco, Egypt, Pakistan, Sri Lanka, Cote d’Ivoire, Ghana, Senegal, and Zambia. A companion study on small open economies is also under development (see Broome and Seabrooke, 2006). On the Asian states alone, see Seabrooke 2006b. The broader study is under development.

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Seabrooke, L. Legitimacy Gaps in the World Economy: Explaining the Sources of the IMF's Legitimacy Crisis. Int Polit 44, 250–268 (2007). https://doi.org/10.1057/palgrave.ip.8800187

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