The International Monetary Fund (IMF’s) governance structure is much more reflective of the world of 1944, when it was established, than of the world today. Since 85 percent is needed in order to amend the IMF’s charter, and for some other important decisions, the United States’ 16.7 percent of voting shares gives it direct veto power over much important decision-making and potential reforms. More importantly, the United States together with other high-income countries has a solid majority. For the past 65 years, Europe and the rest of the high-income world have almost always voted with the United States within the Fund.

Thus, the high-income countries effectively run the organization, with the U.S. Treasury as the principal overseer (despite the fact that the managing director of the IMF is by tradition a European). Low and middle-income countries have almost no significant voice.

There have been efforts for many years to reform the governance structure of the IMF. These finally bore fruit in the Singapore reforms of 2006. Figures 1 and 2 show the voting shares of the IMF before and after the Singapore reforms. As can be seen from the figures, after twelve years of efforts by reformers, the change is very slight. The United States share fell from 17 to 16.7 percent. China, which has the world’s second largest economy and 1.3 billion people, went from 2.9 percent to 3.6 percent. South Korea and Singapore (combined) went from 1.2 percent to 1.7 percent. The rest of the changes were much smaller and basically insignificant. High Income countries went from 52.7 percent to 52.3 percent, maintaining their majority control over decision-making. On the other hand the BRIC (Brazil, Russia, India and China) countries plus Mexico went from 10.1 percent to 11.1 percent. The rest of the world (163 of 185 countries) dropped 0.5 percentage points from 37.1 percent to 36.6 percent.

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