Reforming the Bretton Woods Institutions

The IMF and World Bank were designed when the United States and Western Europe dominated the world economy, and their governance has been slow to change. Voting shares are tied to quotas that have not kept pace with the growth of China, India, Brazil and other emerging economies, and the leadership convention giving Europe the IMF and the United States the World Bank has been criticized as outdated. A 2010 reform doubled IMF quotas and shifted voting share toward emerging markets, but it took effect only in 2016 after delays in the US Congress.

Frustration helped motivate alternatives, such as the BRICS countries' New Development Bank and the China-led Asian Infrastructure Investment Bank, as well as regional currency swap arrangements in Asia. Defenders argue that the existing institutions have deep expertise and that contributors who provide more capital should have more say. The debate is about legitimacy, effectiveness and how power in the world economy should be shared.