Structural adjustment: Will the financial sector shrink and entrepreneurship boom?

This paper argues for an ambitious but realistic approach to defining the future role of the International Monetary Fund (IMF). The IMF is the only international institution with the analytical capacity and political standing to hold all national governments accountable to the same standards for macroeconomic policies and financial sector regulation. By focusing on this task, the IMF will make a crucial contribution to the international coordination of macroeconomic and financial market policies and to preventing future financial crises. This paper makes specific proposals for empowering the IMF for this role. The IMF's independence from individual member state governments should be strengthened and its governance structure should be reformed to enhance ownership by all stakeholders.