The International Financial Institution Advisory Commission, also known as the Meltzer Commission — named for its chair, Professor

Allan Meltzer Allan H. Meltzer (; February 6, 1928 – May 8, 2017) was an American economist and Allan H. Meltzer Professor of Political Economy at Carnegie Mellon University's Tepper School of Business and Institute for Politics and Strategy in Pittsburgh, ...

— was established by the

United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...

in November 1998 "to recommend future US policy toward several multilateral institutions: the IMF, the

World Bank Group The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and best-known development bank in the world and an observer at the United Nations Development Grou ...

, the regional development banks such as the

Inter-American Development Bank The Inter-American Development Bank (IDB or IADB) is an international financial institution headquartered in Washington, D.C., United States of America, and serving as the largest source of development financing for Latin America and the Caribb ...

, the

Bank for International Settlements The Bank for International Settlements (BIS) is an international financial institution owned by central banks that "fosters international monetary and financial cooperation and serves as a bank for central banks". The BIS carries out its work thr ...

, and the

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" as part of legislation authorizing $18 billion of U.S. funding for the International Monetary Fund (IMF).

Majority Report

The Commission's majority report proposed changes to the operations of the International Monetary Fund and especially to those of the World Bank, which the majority recommended should withdraw from lending to so-called "middle income countries". Four (out of 5) Commission members nominated by the then-minority Congressional Democrats filed a dissent from the majority's recommendations (Bergsten, Huber, Levinson and Torres), though one of the four (Huber) both voted for the majority report and joined the dissent. The official vote tally in favor was thus recorded as 8 to 3.

Challenges

Controversy over the majority's arguments and recommendations continued after the report's publication. Critics, including

David de Ferranti Results for Development (R4D) is a global nonprofit strategy consulting organization." Regions and countries Results for Development is active in more than 55 countries. History Founded in 2008 by David de Ferranti, who served with the World Ba ...

, a former Vice President at the World Bank, argued inter alia that the majority report reflected ideological preconceptions rather than any demonstrated understanding of how the World Bank actually works, including the extensive complementarities between World Bank programs and private sector investment in developing countries. The majority's core recommendations are defended by Chairman Meltzer's chief advisor Adam Lerrick and critiqued by de Ferranti in their respective chapters in an edited volume published by the Center for Global Development and fully accessible on the web.

A Different Viewpoint

An alternative perspective is offered by Susanne Soederberg, Associate Professor, Development Studies, Queen's University (Ontario): "The Meltzer Commission drew public attention to the shortcomings of the IFIs but also heightened the legitimacy crisis of

neoliberal Neoliberalism (also neo-liberalism) is a term used to signify the late 20th century political reappearance of 19th-century ideas associated with free-market capitalism after it fell into decline following the Second World War. A prominent fa ...

restructuring of the global South, especially in HIPCs. For instance, the commission charged the IMF with giving too little attention to improving financial structures in developing countries and too much to expensive rescue operations."

Outcome

The report's recommendations were not, in the event, adopted by subsequent U.S. administrations of either party.

References

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External links

What is the Meltzer Commission Report?
University of Iowa Center for International Finance & Development * http://www.cgdev.org/content/publications/detail/9957 Book published by the Center for Global Development entitled "Rescuing the World Bank," which includes a debate on the Meltzer Commission majority's central recommendations between Meltzer's associate Adam Lerrick and one of the Commission's critics, David de Ferranti. Legislative branch of the United States government