Tinkering with the IMF
The International Monetary Fund has been announcing that the world's baleout kings are reforming by re-weighting voting rights to make them more aligned with members' shares of the world economy. Eg people like China and India are to get more votes, smaller European countries less, some African countries up to what they should be etc.
But all this is just orthodox; it is time to try something hetereodox. The IMF has outlived its usefullness as the world's capital markets have become more and more integrated and as the cost of information (not least through the internet) has continued to decrease. The IMF basically provides (free, taxpayer supported) insurance to those wealthy enough to invest in more risky and larger quantities of lending to the governments of poorer countries. These investors get the higher returns but do not suffer the risk as the IMF will step-up and cover the payments if the governments do not.
This removes the incentives for IMF-supported nations to be prudent and economically-sound with their borrowing and spending policies, and is counterproductive for reform and sustainable economic growth within these countries and for creating independence from taxpayer subsidized international development institutions.
This shows that it is time to question the IMF's existence in the first place. The IMF and World Bank were created after World War II to 1) help rebuild Europe, 2) buy 'Western' allegiance from those countries in the non-aligned and developing world, 3) facilitate balance of payments between countries under the gold standard, and 4) to make long-term capital available to countries without a borrowing record and in times of uncertain inflation.
We no longer have the cold war, the gold standard has been replaced by a liberal exchange system, and excessive inflation has been tamed over the last 20 years of the Greenspan regime.
You could argue that during the break-up of colonialism in Africa and Asia in the late 1950s and early 1960s that the IMF might have had a valid new role - that of helping these countries establish sound post-colonial monetary and fiscal regimes. But these countries have now been in existence longer than most of us have been alive so maybe it is time to grow-up and leave the house so to speak.
MOST IMPORTANTLY: The whole construct of the developing world is a self-fulfilling prophecy. The more humanity labels a country as 'developing' and perpetuates institutions around this tautology, the more a country will continue to be 'developing'. It is always developing and never developed. The whole construct is askew. Economics is economics; it doesnt matter if applied to rich or poor. Growth through sound monetary and fiscal policies, sound and non-arbitrary rule of law and economic growth through free trade. These are the keys to 'development', rich or poor.
The Public Choice school of economics describes how bureaucracy have incentives to grow and perpetuate themselves. This is especially true of the international development bureaucracy as there is no domestic constituency demanding results for the spending. Plus development has been made out to be much more complicated than it really is so the 'expert fallacy' also perpetuates. Social change and the reform, or abolishment, of institutions takes time. But the IMF and World Bank are the exception to the rule of the Hegelian march towards freedom. Enough is enough.
For more on the World Bank, the IMF and the World Trade Organization (WTO), specifically in the context of the anti-globalization protest movement, see my paper "The Protestors are Half-Right" at cameroneconomics.com