Time for Change, IMF and World Bank

IMF and World Bank

The two sister organizations engaged in international lending reside across the street from each other in downtown Washington. While the IMF’s mandate covers surveillance of country and regional economies, in particular in relation to banking and currency, and crisis lending, the World Bank focuses on project-based lending for economic development. Regardless of their respective mandates, their actual work entails substantial overlap. More often than expected, they step on each other’s toes and even compromise the objectives of each other—and thus they compromise the objectives of the countries that they represent and those that they serve. Two sets of Executive Boards and two sets of staff are involved. There is substantial duplication and significant “intentional differentiation” of operational and support activities between the two organizations, e.g., human resources policies and practices, technology. These organizations do not only represent two major bureaucracies but in fact a represent a preponderance of excess. The financial year of the two organizations is also different which makes it hard to reconcile and control costs. Time after time, whenever the discussion turns to consolidating these two lenders, there is lack of support from within--given their interests to preserve their respective bureaucracies and high paying jobs--every effort is made to justify keeping the two organizations separate. The staffs of the two organizations earn excessively high salaries for the value added. In today’s financial environment, we cannot afford not to consolidate these two organizations.