Allegations that the head of the IMF manipulated a flagship World Bank ranking to boost China has thrown the organisations into turmoil — and revealed a murky truth about international financial institutions.
The likes of the World Bank and IMF are membership bodies with powerful core shareholders, and therefore far from independent from geopolitics.
Country reports, forecasts and rankings are not delivered on tablets of stone and have always been prone to delicate negotiations between the institutions and the shareholding countries.
“National authorities have always tried to influence international financial institutions’ analyses and the language in documents in order to show themselves in a better light,” said Eswar Prasad, senior fellow at the Brookings Institution and a former head of the IMF’s China division.
“Interactions between national authorities and the institutions become particularly fraught in the…