Reform of the international financial institutions
The recent Mexican peso crisis illustrates both the importance and the limits of the IMF as it now exists. This article identifies two weaknesses in particular which must be addressed if the Fund is to continue role at the centre of international financial coordination. First, the IMF needs adequate resources ‐ and a “quick‐disbursing facility” ‐ with which to help countries that are threatened by sudden shifts in the flow of international capital. Second, enhanced IMF surveillance should focus primarily, but not exclusively, on currency alignments and the policies of all states which are of systemic significance. The article also considers the prospects of improving the World Bank and regional development banks by concentrating on raising the income of the world's “absolute poor.”