Watching from the sidelines? The decline of the IMF's crisis management role

Abstract

This article compares the International Monetary Fund (IMF)'s crisis management role during the Asian financial crisis in 1997–98 with the role it has played during the ‘credit crunch’ which emerged in the wake of the subprime crisis in the United States. With prominent calls for the construction of new forms of global financial governance to prevent a recurrence of the subprime crisis in the future, we explore how the designated guardian of the international financial system has responded to the credit crunch in order to evaluate the strengths and weaknesses of the existing system. Our comparison of the US subprime crisis and the Asian financial crisis of the late 1990s indicates that the IMF has lost credibility with its members, and particularly with its principal sponsor, the United States, which has curbed its capacity to develop multilateral solutions to major financial crises.

Keywords:

• International Monetary Fund
• Asian crisis
• subprime crisis
• policy surveillance

Additional information

Notes on contributors

Mark Beeson

*Mark Beeson is Professor of International Politics and Head of Department in the Department of Political Science and International Studies at the University of Birmingham. His publications include Regionalism and Globalization in East Asia: Politics, Security and Economic Development (Palgrave 2007), Securing Southeast Asia: The Politics of Security Sector Reform (with Alex Bellamy, Routledge 2008), and most recently Institutions of the Asia-Pacific: ASEAN, APEC and Beyond (Routledge 2009). Corresponding author. Email: [email protected]

André Broome

**André Broome is Lecturer in International Political Economy in the Department of Political Science and International Studies at the University of Birmingham. His research explores the changing role of the International Monetary Fund in the global political economy as well as the comparative politics of taxation and monetary reform, and includes journal article publications in Comparative European Politics, Global Society, Journal of International Relations and Development, New Political Economy, Review of International Political Economy, and The Round Table. Email: [email protected]