EU Representation at the IMF – A Voting Power Analysis

Peter Brandner () and Harald Grech ()
Additional contact information
Peter Brandner: Federal Ministry of Finance, http://www.wifo.ac.at
Harald Grech: Oesterreichische Nationalbank, http://www.suerf.com/Hochreiter/

Monetary Policy & the Economy, 2009, issue 3, 93–126

Abstract: To analyze the consequences of a hypothetical consolidated EU representation at the IMF, we regroup the 27 EU Member States into a euro area EU constituency and a non-euro area EU constituency (based on the IMF’s new quota formula) and calculate voting power measures as proposed by Penrose-Banzhaf (PBI) and Shapley-Shubik (SSI). For theoretical reasons and reasons of empirical plausibility, we favor the results based on the SSI. Concerning the Executive Board, our results confirm the PBI-based evidence in the literature, as we find that the two large constituencies (U.S.A and euro area) would have more voting power than their voting shares indicate. Above majority thresholds of 67%, the PBI and SSI results become increasingly divergent, with the difference being most pronounced at the majority threshold of 85%, at which the PBI has already plunged dramatically whereas the SSI remains more or less constant. Concerning the Board of Governors, we find that voting power depends on both EU-related decision rules and the power measure used. If decision-making within the group is based on EU Council votes, smaller EU Member States tend to gain voting power and would hence have an incentive to push EU consolidation. By contrast, most of the larger EU Member States tend to lose voting power and might consequently be inclined to retain the status quo. However, above all by bundling individual euro area concerns, a consolidated euro area representation would act as a booster for the euro area as a whole.

Keywords: IMF; EU; voting power analysis (search for similar items in EconPapers)
JEL-codes: C71 D71 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.oenb.at/dam/jcr:f84c0cc3-7e1d-439a-925 ... s05_tcm16-143522.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbmp:y:2009:i:3:b:5

Ordering information: This journal article can be ordered from
Oesterreichische Nationalbank, Documentation Management and Communications Services, Otto-Wagner Platz 3, A-1090 Vienna, Austria

Access Statistics for this article

Monetary Policy & the Economy is currently edited by Gerhard Fenz and Maria Teresa Valderrama

More articles in Monetary Policy & the Economy from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Rita Glaser-Schwarz ().