From Capital Ebbs and Flows by Joseph P. Joyce:
The protests at Smith College that led to the withdrawal of Christine Lagarde, Managing Director of the International Monetary Fund, as this year’s commencement speaker have been widely denounced as a manifestation of intolerance. They also demonstrate a lack of understanding of the IMF and the many changes that have taken place at that institution in the last decade, as well as Ms. Lagarde’s own record. The IMF adjusted its policies in response to the criticisms it received after the crises of the 1990s, but apparently its critics are mired in the past.
A petition signed by several hundred Smith students and faculty (but not supported bymany Smith faculty, including characteristics of modern English prose, particularly political writing. In addition, the assignment of responsibility to the IMF for the “imperialist and patriarchal systems” is a contemporary example of the “staleness of imagery” that Orwell deplored. Holding the IMF responsible for global poverty reveals a lack of knowledge about the decline in global poverty in recent decades as well as a gross misunderstanding of the IMF’s role. The IMF long ago retreated from the structural adjustment policies that were criticized as inappropriate, and ceded the lead role in addressing poverty to the World Bank. More recently, the IMF was active in responding to the global financial crisis. The Fund in 2008-09 provided large amounts of credit relatively quickly with limited conditionality, and the IMF’s programs contributed to the recovery of global economic activity (see here for more detail).
Blaming Lagarde for global poverty is particularly unjustified in view of her acknowledgement of this issue. She has spoken eloquently about the combined impact of the economic crisis, the environmental crisis and the social crisis that reflects a widening gap in income distribution. To tackle the latter, she has supported more spending on health and education, and the development of social safety nets. Lagarde has also been a strong spokeswoman for gender equality (see also here). The change in the IMF’s position on the use of capital controls predates Lagarde’s tenure, but she has encouraged the continuing intellectual evolution of its Research Department under Olivier Blanchard.
And then there is the irony of students at a prestigious women’s college protesting the invitation extended to a woman who has been a pioneer in raising the professional profile of women. In the male-dominated world of international finance she was the first female finance minister of a member country of the Group of 8, and is the first female head of the IMF. The top position at the IMF became available when her predecessor at the IMF, Dominique Strauss-Kahn, resigned after being charged with sexual assault at a New York hotel. Ironically, the controversy over Lagarde arose as a movie about Strauss-Kahn was being shown at Cannes.
If protestors want to do something to improve the position of the world’s poorest countries, they should aim their ire at those members of the U.S. Congress who are blocking reform at the IMF. The politicians have been stalling passage of the required authorization of changes at the IMF, which would increase the representation of emerging market countries at the Fund. In a rare act of (muted) public criticism, the government of Great Britain has publicly urged the U.S. Congress to ratify the required measures. Reforming the IMF would be a more effective response to global inequality than protesting against someone who has sought to lessen that inequality.