The International Monetary Fund (IMF), created at the end of the second World War at Woods, New Hampshire, to manage an international monetary characterized by fixed exchange rates and heavily restricted international capital flows, now faces widespread questioning of its relevance. Calls for its abolition are not new: with the abandonment of fixed parities by the major industrial countries and the demise of the Bretton Woods system in 1973, the seemed to have become obsolete, or at least to have had its mandate drastically reduced. During the 19803, however, the once again became the key player in international finance by helping to contain the debt crisis affecting developing countries. Private capital flows to developing countries dried up after Mexico's default in August 1982, leaving those countries owing large amounts they could not service; the provided new financing as well as assistance with restructuring their debts.The IMF's role in the world economy was further enhanced when the formerly centrally planned economies began their transition to the market and started to integrate into the world economy at the end of the 19803. The fund lent money to virtually all of those countries, at the same time giving detailed policy advice on structural transformations and the creation of market-based institutions. While private capital flows to many developing countries resumed strongly in the early 19903, access to international capital markets did not eliminate their need for occasional recourse to borrowing from the fund, as private capital was volatile and subject to sudden stops. Thus, the fund was centrally involved in providing loans and policy advice to countries facing crises during the 19903: Mexico, the former tiger countries, Russia, Brazil, and Argentina, among others.The current environment is quite different, and there have been no major market financial crises since Argentina's default in 2001. While the IMF, under pressure from the G7, somewhat increased its lending to Argentina after the default, it was only peripherally involved in advising the government, and played no role in the subsequent debt restructuring. Indeed, President Nestor Kirchner's government, elected in 2003, has made clear its rejection of policy advice and even blamed the institution for the Argentina has now repaid its borrowing early (with the help of a loan from Venezuela), as have Russia and Brazil. With the announcement late in 2006 that Indonesia would not seek another fund program, the IMF's intensive involvement with the Asian crisis countries has ceased. As a result, aside from its program with Turkey, the has no large outstanding loans. This means that its lending goes almost exclusively to the lower-income developing countries, most of it at concessional rates and with the objective of poverty reduction-in close collaboration with the World Bank, which has a clearer mandate in this area.1 Given that the covers its operating expenses with income received from the spread between its lending rate and the rate of remuneration paid to its depositors-the creditor countries, which now constitute the bulk of its membership-the shrinkage in loans outstanding has serious implications for its budget and the continued employment of a staff of well-trained and highly paid economists.More seriously for the IMF's continuing relevance with the middleand upper-income developing countries-the emerging market economies-is the fallout from the policy advice and conditions that accompanied lending during the Asian crises of 1997-98. Those countries almost unanimously viewed the IMF's prescriptions as intrusive and wrong-headed.2 Some have even gone so far as to blame the fund for their economic woes: in Korea, that period is known as the IMF crisis. As a result, countries in east Asia-those affected by the crisis as well as others, in particular China and Japan-have accumulated vast amounts of foreign exchange (forex) reserves that may permit them to ride out future crises without access to the relatively modest amount of financing that might be offered. …