n the Nineties, the Worldwide Financial Fund developed a popularity as a bastion of “neoliberal” economics. The fund was related to the so-called Washington Consensus, which held that international locations ought to try to decontrol their economies, open themselves as much as overseas commerce and worldwide capital flows, steadiness their budgets and hold taxes low.
However lately the IMF has undergone an mental revolution. The secretariat of the Washington-based multilateral establishment stays strongly in favour of free commerce, however it’s now rather more sceptical of the advantages of uninhibited capital flows. And on balanced nationwide budgets, the Fund’s tune may be very totally different.
Even earlier than the pandemic, the IMF was calling on developed international locations to spend extra on infrastructure. Regardless of the large surge in authorities borrowing final yr, it has doubled down on that message, urging rich states to spend to help the restoration and to not fear about bringing down their nationwide money owed whereas rates of interest stay low.
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