The IMF and Economic Policy

Introduction 

International Monetary Fund (IMF) as a global financial institution plays a vital role in ensuring global financial stability. According to Reinhart and Trebesch (2016) the international structure and role of the IMF as global financial regulator anchors on the firm’s ability to guarantee a stable economic environment for the operation of its member states through providing advice on fiscal policies among other financial decision making consultation processes. Economic policy tools are essential in ensuring that countries are in a position of collecting revenue from its local and international trade through applying economic policies. As an example, expenditure changing policies such as an increase in taxation, tariffs, or reducing government expenditure has a way of affecting any country’s balance of trade (Reinhart & Trebesch, 2016). Countries can effectively use increase taxes on import goods to make local products competitive hence boosting local industry revenues. Policy agreements and disagreements are essential tools for international trade as they either facilitate or limit trade between countries. Policy agreements such as tariffs spur trade. Besides, they increase both local and international access of markets, the same remains unlikely for policy disagreements that often subject countries to negotiated periods on tariffs on goods hence limiting international trade. 

IMF Responsibilities 

IMF responsibilities as an international institution anchor on its ability to foster secure financial environments both in member states local markets as well as at the international level ensuring that there exists a stable business environment (Reinhart & Trebesch, 2016). The established cooperation between member countries ensures that there exists an effective cooperation platform capable of sustaining international trade. The IMF, therefore, has an integral role in establishing a robust financial environment among its member states through ensuring that member states engage in fair trade practices through their economic policy tools such as trade tariffs, taxes, they meet reserve thresholds, and interest rates of accessing financial aid. 

Article Summary 

The article by Alex Cobham and Petr Jansky focuses on the global distribution of revenue loss from corporate tax avoidance. The authors emphasize the need for re-estimation and country results based on economic policy tools adopted by low-income countries. The authors base the findings of the article on previous research by IMF that identified the effects of introducing high-quality revenue data as submitted at the International Centre for Tax and Development. Cobham and Janský (2018) provide a country-level basis results that anchor on the available estimates that give a global revenue perspective of about $500 billion on annual estimation across middle and low-income member countries across the Latin-America, Sub-Sahara Africa, and the South Asian countries. The findings by Cobham and Janský (2018) based on IMF records on middle and low-income member states revolves around ensuring that there exists a more representative tax regime that would allow room for changes in tax laws without affecting the revenues collected by the country tax collection agencies. The article concurs to the IMF focus on global policymakers as the primary cautionary platform from which middle and low-income economies can benchmark on matters economic policy as a measure of fostering sustainable economic development across their various jurisdictions. 

Conclusion 

IMF in its capacity as an international institution plays a significant role in determining member states economic policy direction through an advisory on regulation and other financial measures. In this context, the IMF remains as a central institution in promoting trade across countries, establishing robust and performing economies among member countries without compromising on their sustainable economic development. Cobham and Janský (2018) focus on international corporate tax as a vital government financing source across several IMF member countries. As a source of national revenue, the article attributes the losses incurred by the IMF as related mainly to the corporate taxation regimes applied by these countries. 

References 

Cobham, A., & Janský, P. (2018). Global distribution of revenue loss from corporate tax avoidance: re‐estimation and country results.  Journal of International Development ,  30 (2), 206-232. 

Reinhart, C. M., & Trebesch, C. (2016). The international monetary fund: 70 years of reinvention.  Journal of Economic Perspectives ,  30 (1), 3-28.