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International Financial Institutions and Accountability

International Financial Institutions and Accountability

The Need for Drastic Change

International Financial Institutions (IFIs) are a singular and alien element within market economies. Their decisions are totally delinked from financial accountability. Strongly determining their clients' policies, they refuse to be financially accountable, forcing borrowers to pay for damages negligently and tortiously caused by IFI-staff. IFIs even gain financially by giving new loans to repair such damages. This mechanism reminiscent of former Communist economies is irreconcilably at odds with the market mechanism. The important questions are whether an acceptable level of success can be proved, whether organisational arrangements provide incentives to avoid (particularly the same) errors in the future, and who has to pay for these errors. Systemic failures causing inefficiencies, encouraging political interference, and hurting the poor in particular exist because IFIs are not financially accountable. For their advice IFIs have to become as financially accountable as consultants already are.