Macroeconomic Policy Surveillance

TL;DRAbstract

Macroeconomic policy “surveillance,” as James Boughton (2001: 67) points out, did not become part of the formal language of the International Monetary Fund until the Second Amendment of its Articles of Agreement in 1977. The revised Article IV (Section 3a) set out two distinctive forms of policy surveillance: “multilateral surveillance,” requiring the Fund to “oversee the international monetary system to ensure its effective operation,” and “bilateral surveillance,” requiring it to “oversee the compliance of each member with its obligations under Article IV, Section 1.” Article IV is concerned with member state “obligations regarding exchange arrangements,” though it also contains general language on each member state’s obligations to “endeavor to direct its economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability.” The IMF’s general surveillance function thus stems from an assumed mutual responsibility to collaborate in

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