Who is Running the IMF: Critical Shareholders or the Staff?

27 Pages Posted: 27 Jan 2007

See all articles by Michele U. Fratianni

Michele U. Fratianni

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Universita' Politecnica delle Marche

John C. Pattison

Canadian Imperial Bank of Commerce

Date Written: January, 2004

Abstract

The paper deals with the principal-agent relationship at the International Monetary Fund (IMF). We argue that residual control rights at the IMF are vested with the critical shareholders, the countries included in the G-7. This group controls vast financial resources and enjoys the highest regulatory and governance standards among IMF members. Imperfect incentives for monitoring and the complexity of the issues give staff and management a degree of autonomy. The evidence marshalled in the paper suggests that critical shareholders are in charge on those issues they care most about, leaving discretion to staff and management on peripheral issues.

Keywords: IMF, G-7, principal-agent relationship, critical shareholder, staff autonomy

JEL Classification: D71, F13, F15

Suggested Citation

Fratianni, Michele and Pattison, John C., Who is Running the IMF: Critical Shareholders or the Staff? (January, 2004). Available at SSRN: https://ssrn.com/abstract=959611 or http://dx.doi.org/10.2139/ssrn.959611

Michele Fratianni (Contact Author)

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-855-3360 (Phone)
812-855-3354 (Fax)

Universita' Politecnica delle Marche ( email )

Piazzale Martelli, 8
60121 Ancona
Italy
39-071-2207120 (Phone)

John C. Pattison

Canadian Imperial Bank of Commerce ( email )

Commerce Court West
199 Bay St
Toronto, Ontario M5L 1A2
Canada

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