How the IMF Makes Decisions

February 23, 2021

The IMF has evolved along with the global economy throughout its history, allowing the organization to retain a central role within the international financial architecture. Unlike the General Assembly of the United Nations, where each country has one vote, decision making at the IMF was designed to reflect the relative positions of its member countries in the global economy. The IMF continues to undertake reforms to ensure that its governance structure adequately reflects fundamental changes taking place in the world economy, including the larger role that emerging market and developing economies now play in the global economy.

The diagram below provides a stylized view of the IMF's current governance structure. 


Board of Governors

The Board of Governors is the highest decision-making body of the IMF. It consists of one governor and one alternate governor for each member country. The governor is appointed by the member country and is usually the minister of finance or the head of the central bank.

While the Board of Governors has delegated most of its powers to the IMF’s Executive Board, it retains the right to, among other things, approve quota increases, allocate or cancel special drawing right (SDR), the admittance of new members, compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws.

The Board of Governors also elects Executive Directors and is the ultimate arbiter on issues related to the interpretation of the IMF’s Articles of Agreement. Voting by the Board of Governors may take place either by holding a meeting or remotely (through the use of courier services, electronic mail, facsimile, or the IMF’s secure online voting system). Decisions are made by a majority of votes cast, unless otherwise specified in the Articles of Agreement.

The Boards of Governors of the IMF and the World Bank Group normally meet once a year, during the IMF–World Bank Annual Meetings, to discuss the work of their respective institutions. The Annual Meetings, which take place in September or October, have customarily been held in Washington for two consecutive years and in an alternate member country in the third year.

Ministerial Committees

The Board of Governors is advised by two ministerial committees, the International Monetary and Financial Committee (IMFC) and the Development Committee.

The IMFC has 24 members, drawn from the pool of 190 governors, and represents all member countries. Its structure mirrors that of the Executive Board and its 24 constituencies. The IMFC meets twice a year, during the IMF–World Bank Spring and Annual Meetings, to discuss the management of the international monetary and financial system, proposals by the Executive Board to amend the Articles of Agreement, or any other matters of common concern affecting the global economy. The Committee issues a communiqué summarizing its views following each meeting, providing guidance for the IMF’s work program. The IMFC operates by consensus and does not conduct formal votes.

The Development Committee is a joint committee, tasked with advising the Boards of Governors of the IMF and the World Bank on issues related to economic development in emerging market and developing countries. The committee has 25 members (usually ministers of finance or development). It represents the full membership of the IMF and the World Bank and mainly serves as a forum for building intergovernmental consensus on critical development issues.

The Executive Board

The IMF’s 24-member Executive Board conducts the daily business of the IMF and exercises the powers delegated to it by the Board of Governors, as well as those powers conferred on it by the Articles of Agreement. With the entry into force of the Board Reform Amendment on January 26, 2016, the all-elected Executive Board has been in place since the subsequent election took effect on November 1, 2016. 

The Board discusses all aspects of the Fund’s work, from the IMF staff's annual health checks of member countries' economies to policy issues relevant to the global economy. The Board normally makes decisions based on consensus, but sometimes formal votes are taken. The votes of each member equal the sum of its basic votes (equally distributed among all members) and quota-based votes. Therefore, a member’s quota determines its voting power. Following most formal meetings, the Board summarizes its views in a document known as a Summing Up. Informal meetings may also be held to discuss complex policy issues at a preliminary stage.

IMF Management

The IMF’s Managing Director is both chairman of the IMF’s Executive Board and head of IMF staff. The Managing Director is appointed by the Executive Board for a renewable term of five years and is assisted by a First Deputy Managing Director and three Deputy Managing Directors. The IMF’s Governors and Executive Directors may nominate nationals of any of the Fund’s member countries for the position of Managing Director. Although the Executive Board may select a Managing Director by a majority of votes cast, the Board has in the past made such appointments by consensus. For the 2011 selection, the Executive Board adopted a procedure that allowed the selection of the next Managing Director to take place in an open, merit-based, and transparent manner. The Executive Board adopted the same procedure to govern the selection in  2016 and 2019.

Governance reform

The Fund’s governance structure must keep pace with the rapidly evolving world economy to ensure it remains an effective and representative institution of all its 190 member countries. To secure this objective, in December 2010 the Board of Governors of the IMF completed the 14th General Review of Quotas, which involved a package of far-reaching reforms of the Fund's quotas and governance. The conditions for the effectiveness of these reforms were met on January 26, 2016. Among others, the reform included:

  • A quota increase and shift in shares. The 14th General Review of Quotas resulted in an unprecedented doubling of quotas and a major realignment of quota and voting shares to emerging and developing countries (with a more than 6 percent quota shift to dynamic emerging market and developing countries, and under-represented countries). 

  • Protecting the quota and voting share of the poorest member countries. This group of countries was defined as those eligible for the low-income Poverty Reduction and Growth Trust (PRGT) and whose per capita income fell below $1,135 in 2008 (the threshold set by the International Development Association) or twice that amount for small countries.

  • Quota formula and next review. A comprehensive review of the current quota formula was completed in January 2013, when the Executive Board submitted its report to the Board of Governors. Work on a new quota formula also continued in the context of the 15th General Review of Quotas.

  • A new composition and more representative Board.  The 2010 reforms also included an amendment to the Articles of Agreement established an all-elected Executive Board, which facilitates a move to a more representative Executive Board (as noted above, the first all-elected Board has been in place since November 2016). The European members are committed to reducing by two the number of Board members representing advanced European countries in favor of emerging market and developing countries, and have made significant progress.

At the conclusion of the 14th Review, the membership agreed to bring forward the deadline for completing the 15th General Quota Review to January 2014. However, given the delay in implementing the 2010 reform, work on the 15th Review did not start until later in 2016. On December 5, 2016, the Board of Governors adopted a Resolution, calling on the Executive Board to complete the 15th Review by the Spring Meetings of 2019 and no later than the Annual Meetings of 2019.

In early 2019, it became evident that it would not be possible to secure the required support for a quota increase under the 15th Review, triggering discussions on a package on resources and governance reform, which was endorsed by the IMFC in October 2019. In line with the October 2019 IMFC communiqué, on February 7, 2020, the Board of Governors adopted a resolution, completing the 15th Review without an increase in quotas and providing guidance for the 16th Review, to be completed no later than December 15, 2023. As part of the 16th Review, the Executive Board will revisit the adequacy of quotas and continue the process of IMF governance reform.

Good governance

The Fund actively promotes good governance within its own organization. It has adopted a number of integrity institutions, including a Code of Conduct for Staff—bolstered by financial certification and disclosure requirements, and sanctions—a similar Code of Conduct for Members of the Executive Board, and an Integrity Hotline offering protection to “whistleblowers.” The IMF Ethics Office advises the institution and its staff on ethics issues, inquires into alleged violations of rules and regulations, and oversees the ethics and integrity training program for all staff members. Accountability arrangements have also been put in place to ensure effective implementation of the strategic priorities of the institution.