International Monetary Fund

The International Monetary Fund (IMF) is an international financial institution and a specialized agency of the United Nations, headquartered in Washington, D.C. It consists of 191 member countries, and its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world." The IMF acts as a lender of last resort to its members experiencing actual or potential balance of payments crises.

Established in July 1944 at the Bretton Woods Conference based on the ideas of Harry Dexter White and John Maynard Keynes, the IMF came into formal existence in 1945 with 29 member countries and the goal of reconstructing the international monetary system. For its first three decades, the IMF oversaw the Bretton Woods system of fixed exchange rate arrangements. Following the collapse of this system in 1971, the Fund's role shifted to managing balance-of-payments difficulties and international financial crises, becoming a key institution in the era of globalization.

Through a quota system, countries contribute funds to a pool from which they can borrow if they experience balance-of-payments problems; a country's quota also determines its voting power. As a condition for loans, the IMF often requires borrowing countries to undertake policy reforms, known as structural adjustment. The organization also provides technical assistance and economic surveillance of its members' economies.

The IMF's loan conditions have been widely criticized for imposing austerity measures that can hinder economic recovery and harm the most vulnerable populations. Critics argue that the Fund's policies limit the economic sovereignty of borrowing nations and that its governance structure is dominated by Western countries, which hold a disproportionate share of voting power. The current managing director and chairperson is Bulgarian economist Kristalina Georgieva, who has held the position since 1 October 2019.

The IMF was originally laid out as a part of the Bretton Woods system exchange agreement in 1944. During the Great Depression, countries sharply raised barriers to trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade.

This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met at the Bretton Woods Conference in the Mount Washington Hotel in Bretton Woods, New Hampshire, in the United States, to discuss a framework for postwar international economic cooperation and how to rebuild Europe.^{[citation needed]}

There were two views on the role the IMF should assume as a global economic institution. American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time. Most of White's plan was incorporated into the final acts adopted at Bretton Woods. British economist John Maynard Keynes, on the other hand, imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped governments and act as the United States government had during the New Deal to the great depression of the 1930s.

The agreement at Bretton Woods implied that both the IMF and the World Bank would be headquartered in the United States. US Treasury Secretary Henry Morgenthau Jr. intended them to be located in New York, but his successor Fred M. Vinson unilaterally decided that they would be in Washington, D.C. instead, noting that "the institutions would be fatally prejudiced in American opinion if they were placed in New York, since they would then come under the taint of 'international finance'". The IMF formally came into existence on 27 December 1945, when the first 29 countries ratified its Articles of Agreement. By the end of 1946 the IMF had grown to 39 members. On 1 March 1947, the IMF began its financial operations, and on 8 May France became the first country to borrow from it.