Benn Steil

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A GDP-Based IMF Would Boost China’s Voice . . . and America’s

by Benn Steil and Dinah Walker
January 22, 2013

reallocation

Since its creation after the 1944 Bretton Woods conference, membership of the International Monetary Fund (IMF) has grown from 29 countries to 188.  Representation, in terms of votes and quotas, has also become less connected with the relative weights of each country in the global economy.  As today’s Geo-Graphic shows, China would be by far the biggest beneficiary of an IMF voting reallocation based purely on gross domestic product, gaining eight percentage points.  What is much less well known, however, is that the United States would be the second biggest beneficiary, well above third-place Japan and fourth-place Brazil.  As the United States already has enough votes to wield unique veto power, this would have little practical effect on its already enormous influence.  But it does explain why the United States has been consistently more aligned with the so-called BRIC developing nations on IMF reform than with its fellow rich nations in Europe.

Steil: The Battle of Bretton Woods
Financial Times: IMF Focus on Europe Irks Emerging Markets
Foreign Policy: Losing at the IMF
Congressional Research Service: Issues for Congress: IMF Reforms

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