Voting Power in the Governance of the International Monetary Fund

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Voting Power in the Governance of the International Monetary Fund (2002)

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by Dennis Leech , Dennis Leech , Richard Higgott , Madeleine Hosli , Marc Kilgour , Peter Law , Moshé Machover , Miquel Manjon , David Rapkin , Dr D Leech , Cv Al

Venue:	Annals of Operations Research
Citations:	39 - 8 self

BibTeX

@ARTICLE{Leech02votingpower,
    author = {Dennis Leech and Dennis Leech and Richard Higgott and Madeleine Hosli and Marc Kilgour and Peter Law and Moshé Machover and Miquel Manjon and David Rapkin and Dr D Leech and Cv Al},
    title = {Voting Power in the Governance of the International Monetary Fund},
    journal = {Annals of Operations Research},
    year = {2002},
    volume = {109}
}

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Abstract

In general in an organisation whose system of governance involves weighted voting, a member's weight in terms of the number of votes and the formal power it represents differ. Power indices provide a means of analysing this difference. The paper uses new algorithms for computing power indices for large games. Three analyses are carried out: (1) the distribution of Banzhaf voting power among members in 1999; the results show that the United States has considerably more power over ordinary decisions than its weight of 17% but that the use of special supermajorities limits its power; (2) the effect of varying the majority requirement on the power of the IMF to act and the powers of members to prevent and initiate action (Coleman indices); the results show the effect of supermajorities severely limits the power to act and therefore renders the voting system ineffective in democratic terms, also the sovereignty of the United States within the IMF is effectively limited to just the power of veto; (3) the paper proposes the determination of the weights instrumentally by means of an iterative algorithm to give the required power distribution; this would be a useful procedure for determining appropriate changes in weights consequent on changes to individual countries' quotas; this is applied to the 1999 data. Policy recommendations are, first, that the IMF use only simple majority voting, and discontinue using special supermajorities, and, second, allocate voting weight instrumentally using power indices. Keywords: Power Indices; Banzhaf Index; Coleman Index; IMF; Keynes. VOTINGPOWER IN THE GOVERNANCE OF THE IMF The system of governance of the IMF is of considerable interest as a research topic not only because of the crucial importance of international financial organisation...

Keyphrases

power index international monetary fund united state special supermajorities new algorithm coleman index formal power simple majority voting allocate voting weight individual country international financial organisation large game considerable interest governance involves voting system research topic ordinary decision useful procedure appropriate change crucial importance banzhaf index weight consequent iterative algorithm democratic term imf use majority requirement required power distribution votingpower governance policy recommendation

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