Trade Diversion

The IMF’s next chief economist will be Simon Johnson.

I doubt that these suggestions will be implemented soon, but they are interesting nonetheless:

The International Monetary Fund should stop offering long-term finance to developing countries, leaving the World Bank to be the global development agency, a high-level independent committee reported on Tuesday…

It should “clarify its ongoing financing activities in low-income countries and gradually withdraw from providing base line financing… over long periods in the context of a ‘development programme’,” said the report.

In particular, the IMF should stop meddling in microeconomic policies of poor countries, where the bank had specialist knowledge. “The fund should rely on the bank for sectoral assessments,” it concluded.