CAMBRIDGE – The US Congress has now carelessly blocked a long-awaited reform of the International Monetary Fund. That would be bad enough if it were an isolated episode. But this is just the latest in a series of self-inflicted blows since the turn of the century that have needlessly undermined the United States’ claim to global leadership.
The IMF reform would have been an important step in updating the allocations of quotas, which determine member states’ monetary contributions and voting power. The US was not being asked to contribute more money or lose its voting weight, which has always given it a unique veto power. Instead, the proposed increase in quotas for China, India, Brazil, and other emerging economies would have come largely at the expense of European countries.