Computing the Power Distribution in the IMF
19 Pages Posted: 7 Mar 2016
Date Written: March 4, 2016
The International Monetary Fund is one of the largest international organizations using a weighted voting system. The weights of its 188 members are determined by a fixed amount of basic votes plus some extra votes for so-called Special Drawing Rights (SDR). On January 26, 2016, the conditions for the SDRs were increased at the 14th General Quota Review, which drastically changed the corresponding voting weights.
However, since the share of voting weights in general is not equal to the influence, of a committee member on the committees overall decision, so-called power indices were introduced. So far the power distribution of the IMF was only computed by either approximation procedures or smaller games than then entire Board of Governors consisting of 188 members. We improve existing algorithms, based on dynamic programming, for the computation of power indices and provide the exact results for the IMF Board of Governors before and after the increase of voting weights. Tuned low-level details of the algorithms allow the repeated routine with sparse computational resources and can of course be applied to other large voting bodies. It turned out that the Banzhaf power shares are rather sensitive to changes of the quota.
Keywords: power indices, weighted voting games, International Monetary Fund, Shapley-Shubik index, Banzhaf index, empirical game theory
JEL Classification: C71, D71
Suggested Citation: Suggested Citation