Friday, 11 February 2011


Well, it's official. The International Monetary Fund suffers from "groupthink" and a lack of critical thinking... or at least it did between 2004 and 2008, according to its own "Independent" Evaluation Office (IEO).

The IEO defines "groupthink" (at para 42) as "the tendency among homogeneous, cohesive groups to consider issues only within a certain paradigm and not challenge its basic premises (Janis, 1982)." In this context, the IMF's macroeconomists agreed with those in the UK and US that advanced economies were sound, resilient, could allocate resources efficiently and redistributed risks to those able to bear them.

Street: our finances are as good as gold.

In this belief, "the IMF was overly influenced by (and sometimes in awe of) [their counterparts at the central banks]... perhaps a case of intellectual capture."

So what's happened since 2008?

Well, in between visits to the PIGS, I guess the IMF has been waiting patiently on the IEO's report. After all, "the IEO’s mission is to:
* enhance the learning culture within the Fund,
* strengthen the Fund's external credibility,
* promote greater understanding of the work of the Fund, and
* support institutional governance and oversight."
Which raises the obvious question: has the IEO fulfilled its mission in the period 2003 to date?

Or, in pukka, quis custodiet ipsos custodes?

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