Yet here I go again, in The Washington Post’s Monkey Cage blog.
I actually spend one of the 13 weeks of my development class talking about the mistakes of the World Bank and IMF in the 1980s and 1990s. So I’m an unusual defender.
But I don’t think of it so much of it as a defense of the IMF as promoting a particular way of thinking about public finance and development: that poor governments face hard choices, have have deep capacity problems, and that while organizations like the IMF might have made things worse in the past, it doesn’t do to ignore the fundamental problems.
Especially in weak states. If I have one refrain, it’s that you can’t take what you’ve learned in strong states and apply it in fragile ones.
There have been some good points on all sides. This is going to be my last word. An excerpt:
I want to suggest a rule of thumb for any public finance question: When someone suggests “This country should spend more on X”, the most important thing you can ask is the unpleasant accounting question: “Where should that money come from?” More loans? More aid? Less spending on something else? The next thing you should do is take back the point I conceded, and ask whether spending equals results. Because of tradeoffs: money wasted on one thing is money not spent saving lives in other ways. Anything less doesn’t add up, IMF or not.