The transformation from an institution that used to publish virtually nothing to an institution that publishes virtually everything took place in a very short period of time. We like to believe that our influence in this policy change was not negligible, not least with our unilateral decision in 1994 to publish the Fund report of the first Swiss Article IV consultation against all the then-existing rules. This was a precursory move that, although it earned our executive director a few moments of severe and formal reproof from the Board, had the merit to de-dramatize the publication debate by showing that the world would not come to an end if more information was disseminated about national policies. Subsequent developments have proved that much more could be done without jeopardizing the fine trade-off between openness and maintaining the Fund’s role as a confidential advisor to its members. Transparency is important not only for legitimacy reasons. In the new information-technology world, it has become a crucial element of stability. Transparency, together with more reliable information, facilitates a smoother functioning of markets and helps them in assessing risks more accurately, thereby strengthening market discipline. Stronger market discipline through transparency must be the new rule. Globalisation forces us to change. This means, for instance, that the range of action has considerably shrunk for those countries - rich or poor - that are active on financial markets.
This must include not only the member’s adjustment plans, but also its institutional and political capacity to deliver this adjustment. This also means that the cooperation between authorities and the Fund must be good and capable of generating constructive team-work. It has been easier to define this framework than to implement it. To some extent, this is not surprising, as one cannot avoid that a strong element of judgment will influence the assessment of the three above-mentioned conditions. And when there is room for judgment, there is always room for political interference. Moreover, if we add the fact that the alternative to large financing very often is the prospect of a full-blown crisis, with unpredictable but certainly high - and possibly systemic costs - it is not difficult to understand why the international community has often condoned sub-optimal decisions. One way to improve the situation and to eliminate this decision bias towards excessive Fund financing would be to find ways to involve more consistently the private sector in the resolution of crises and thereby in burden sharing. Once again, this is easier said than done. Progress in this respect has been disappointingly slow to emerge. Should we conclude that it is too difficult for the IMF to say no? I would definitely not go that far. While recognizing that capital crisis decisions may be too important to leave only to experts, bending the rules too often can also have serious consequences.