Ten years after the financial crisis, the International Monetary Fund (IMF) remains largely beholden to policies that undermine human rights and exacerbate inequality around the world. In response to the global recession, the IMF pressured countries to restructure sovereign debt—in part by adopting austerity measures that eroded basic needs such as health care and income security. The resulting human cost was immense, and the organization, while articulating more progressive policies, has been unable to heed the lessons of their failures.
The IMF exerts its power by dictating fiscal policies in exchange for loans and by providing risk analysis and technical assistance. The financial terms it imposes on governments have been derided as a one-size-fits-all approach with a myopic focus on economic growth. Dogged by these criticisms, the organization has recently trumpeted some reforms, as it often does in response to cycles of negative publicity. Laudably, the fund has been engaging with issues of gender and economic inequality, corruption, and climate change. Now, for example, the IMF more robustly considers the social dimensions of its macroeconomic policies, such as their impact on vulnerable populations. Even the fund’s strict adherence to market fundamentalism has come in for some introspection. In 2016, three IMF economists praised aspects of neoliberalism, but found that several of its central tenets had been “oversold,” admitting that austerity could have harmful consequences, that inequality hampers growth, and “that policymakers should be more open to redistribution than they are.”
Christine Lagarde, the IMF’s managing director, has been a particularly vocal champion of reform since taking over in 2011. Under her tenure, climate change and inequality have assumed an increased urgency. Lagarde claimed in 2014 that the IMF was no longer pushing the much-maligned structural-adjustment programs—a combination of privatization, slashing public spending, financial deregulation, trade liberalization, and labor market reforms. These developments raised cautious hopes that the IMF was finally undergoing a renaissance.
Unfortunately, it appears that the fund is adopting the rhetoric of reform—softening its image and mollifying its critics—but failing to make the changes that will meaningfully upend the status quo. Despite the rebranding, many of the fund’s damaging policies have continued apace. And, according to critics, many of the touted modifications are inadequately conceptualized, ineffectively implemented, and fail to address the core of the problems. “The IMF, as led by Ms. Lagarde, is on the right track, but it will be a mammoth task to change the direction of this ‘oil tanker’ of an institution and ensure that the benefits of globalization no longer accrue overwhelmingly to the wealthy,” said Philip Alston, the UN special rapporteur on extreme poverty and human rights.