The air is rife with proposals to reform the International Monetary Fund, increase its funds and create new international agencies to help guide global financial markets. Such talk is on a par with the advice to the inebriate that the cure for a hangover is the hair of the dog that bit him. We do not need another IMF. . . . Once the Asian crisis is over, we should abolish the one we have.
Centralized planning works no better on the global than on the national level.
The IMF lost its only function and should have closed shop. But few things are so permanent as government agencies, including international agencies. It found plenty of clients, even though its advice was not always good and, even when good, was not always followed. However, its availability, and the funds it brought, encouraged country after country to continue with unwise and unsustainable policies longer than they otherwise would have or could have. Russia is the latest example.