International agency founded at Bretton Woods in 1945 and now located in Washington, DC, with 151 member countries providing a pool of currencies, gold and SPECIAL DRAWING RIGHTS to stabilize currencies. The only major countries outside it have been the USSR and Switzerland. It was set up to end the BEGGAR-MY-NEIGHBOUR policies of the 1930s by establishing an exchange rate regime. KEYNES had wanted an INTERNATIONAL CLEARING UNION providing automatic credit to countries in difficulties, but the US view that it should be a small, tightly controlled fund, obeying the rules of US capitalism, prevailed.
Originally, under Article 1 of its Charter, the IMF’s broad objectives included facilitating the balanced growth of free international trade according to the principle of COMPARATIVE ADVANTAGE. In practice, it has been principally concerned with broad macroeconomic policies designed to reduce the BALANCE OF PAYMENTS deficits and currency difficulties of member countries. Criticisms of its policies include the view that it forces adjustment on the countries in difficulty, rather than on those who have caused balance of payments deficits, e.g. by contributing to a change in the TERMS OF TRADE. The departments of the IMF cover the major areas of the world, stabilization programmes, research on international monetary economics and the provision of advice on public finance and central banking.
