Smith Panel Addresses History of the IMF

Kyle Kaplan '15 Arts Editor

Last Friday, on February 28, the Lewis Global Studies Center hosted a panel of five Smith faculty members in response to the conversations that were being had about the IMF and Christine Lagarde as Smith’s commencement speaker. When asked if it was the LGSC’s idea to coordinate this event, Faculty Director of LGSC and Mary Huggins Gamble Professor of Government Greg White said, “The abroad office participated with a bunch of people so this could happen today. There were lots of emails, and trying to figure out a good space and time.”

In the Carroll Room of the Campus Center, Professor White moderated a panel comprised of Assistant Professor of Economics Vis Taraz, Assistant Professor of Sociology Payal Banerjee, Assistant Professor of Economics Simon Halliday and Assistant Professor of Economics Roisin O’Sullivan. Each discussed the history of the IMF, careful to describe both its benefits and drawbacks as an organization in some of the countries it has occupied.

Professor Taraz began the panel by explaining the Washington Consensus, a structural adjustment package that was implemented by the IMF and World Bank in the 1980s through the 1990s. Economists at the time, Professor Taraz said, thought this ten-point policy plan should be adopted by all countries in the interest of economic growth—which is why the IMF and World Bank introduced it to the economies of the developing countries it was in. “The IMF started offering poor countries loans, but these loans came with strings attached. Poor countries where the Washington Consensus was put into practice had to open themselves up to trade, reform their tax code, privatize publically owned companies and deregulate certain industries.” Realizing the Washington Consensus was ineffective, she went on to say that she and current economists feel, “The Washington consensus reforms failed because they were implemented all at once, they did not take into consideration social elements of development, and they did not focus on specific country contexts.”

Professor Banerjee, who spoke after, also addressed how the structural adjustment policies the IMF tried to establish, such as free trade and deregulation functioned, as well as how global economies develop in general. “The global economy, which is a dynamic between rich and poor countries, is a relationship that has a specific history in colonialism and due to this history it is rooted in a political economy characterized by severely unequal distribution of wealth and gains from globalization. The IMF creates loans, and conditions attached to those loans play a critical role in shaping the economic and therefore the political relationship shared between rich and poor countries.”

After all panelists had spoken, Professor White invited questions and observations from the audience, where President Kathleen McCartney was also present. Many observations were made by students, who either responded to the background information given about the IMF and its use of SAPs, or responded to the choice of Lagarde as this year’s commencement speaker in light of this history. While Professor O’Sullivan remarked when describing her own experience working in economics that “being a women in this environment, and becoming a financial minister is no small thing,” little else was said about Chistine Lagarde.