The IMF Is Not the Problem

Brazil's current presidential election campaign has again brought the IMF to the center of international debate. Are IMF cures worse than the disease, as critics such as Nobel laureate Joseph Stiglitz allege? Kenneth Rogoff, the IMF's chief economist, speaks for the defense.

Throughout much of the world, the IMF is caricatured as a demon of austerity. Wherever the IMF appears on the scene to provide financial assistance, painful government budget cuts seem certain to follow. This image of austerity appeals to the emotional need for stories with villains. After all, good villains sell books--including books about globalization that demonize the IMF.

But does the image reflect reality? Is the IMF, the member of the UN family charged to maintain global financial stability, really so evil or misguided that it can only propose policies that inflict economic pain instead of alleviating it?

I admit that the IMF has its faults, and I don't aim to gloss over them. Until a year ago, when I left a professorship at Harvard University to become the Fund's chief economist, I was a vocal, if perhaps not vitriolic, critic of the IMF's management of the international monetary system.