The World Bank’s 2007 Doing Business Report rewards countries with low levels of labour protection and the IMF’s World Economic Outlook urges labour market deregulation. This has prompted calls from organised labour, developing country governments and US senators for the institutions to respect the standards of the International Labour Organization (ILO).
The IMF’s ability to dictate economic policy to member states is fraying because of lost credibility in the wake of its failures in East Asia, Argentina and Russia. Developing countries are now rejecting the Fund’s interference in their economies.
In September the Independent Evaluation Group (IEG) released its review of World Bank support to 'fragile states'. The report gave the Bank a mixed review on its effectiveness, but raised serious questions about both the way the Bank is organised internally to deal with fragile states and the system it uses to allocate resources. Researchers and Bank-watchers question whether the review has gone far enough to examine what causes state 'fragility' and what role Bank-led reforms and projects may
The annual meetings of the World Bank and the IMF in Singapore faced controversy over the ‘blacklisting’ of civil society participants.
In an evaluation of the IMF Independent Evaluation Office's first five years of work, an external committee concluded that the IMF board may have undue influence over the body. Additionally the IEO set itself an ambitious work plan for the next year, as it plans to delve into the Fund's internal organisation and trade policy
After months of official wrangling and European stalling, proposals for changing IMF quotas, which determine financial contributions and voting power in the organisation, have coalesced around a small ad hoc increase for four countries, a commitment to make the quota formula more closely match economic realities and an increase in the basic vote
The Independent Evaluation Group published an evaluation of World Bank assistance for natural disasters, finding that the Bank lacks a strategic approach to disasters, is failing to integrate disaster preparation in its lending, and lacks sufficient expertise or coordination mechanisms.
The managing director's report on the medium-term strategic review released at the spring meetings was short on specific proposals for reform implementation and lacked commitments for improved democratic functioning or strengthened surveillance of large industrial countries.
Under the current IMF strategic review, a "review of the effectiveness of the Fund's instruments to facilitate crisis resolution" is planned. Ilene Grabel, professor of international finance at the University of Denver, argues that the Fund must move from being a reactive institution to being a pro-active one. The IMF should use its technical expertise to mitigate the risks that culminate in financial crises, involving a programme of 'trip wires and speed bumps'.
The Independent Evaluation Office report on the Financial Sector Assessment Program describes the programme as a "distinct improvement" in the Fund's ability to conduct financial sector surveillance.