Voting power in the Bretton Woods Institutions
Leech, Dennis and Leech, Robert, Dr. (2004) Voting power in the Bretton Woods Institutions. Working Paper. University of Warwick, Department of Economics, Coventry.
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The constitutions of the Bretton Woods Institutions require decisions to be taken by weighted voting: each member country possesses a number of votes, depending on its quota allocation, all of which must always be cast as a bloc. This leads to a problem of democratic legitimacy since a member's influence or voting power within such decision-making systems does not necessarily correspond to its voting weight. In previous work is has been shown that the present system of weighted voting in the IMF gives disproportionate influence to the USA at the expense of all other members. This effect occurs in both the board of governors and the executive board. This paper looks at the power implications of the structure of the IMF and World Bank executive boards (in which members are grouped into constituencies that cast their combined weighted votes as a bloc) from the point of view of formal voting power (using the Penrose power index). A criticism that is frequently made is that the present constituency structure and voting weights work to enhance the power of the developed and creditor countries at the expense of the poor, and that many countries are effectively impotent; we show that the weighted voting system adds to this anti-democratic bias and produces some unintended effects (for example the disfranchisement of Estonia in the Nordic/Baltic constituency and of five Central American republics in the Spanish/Mexican/Venezuelan constituency, even though in neither case is there a dictator). We argue generally that the voting power approach is more than just the calculation of power indices and can in fact produce solid facts by identifying cases where members of weighted voting bodies are actually disfranchised.
|Item Type:||Working or Discussion Paper (Working Paper)|
|Subjects:||H Social Sciences > HC Economic History and Conditions|
|Divisions:||Faculty of Social Sciences > Economics|
|Library of Congress Subject Headings (LCSH):||United Nations Monetary and Financial Conference (1944 : Bretton Woods, N.H.), International Monetary Fund, World Bank, International economic relations, International finance|
|Series Name:||Warwick economic research papers|
|Publisher:||University of Warwick, Department of Economics|
|Place of Publication:||Coventry|
|Number of Pages:||34|
|Status:||Not Peer Reviewed|
|Access rights to Published version:||Open Access|
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