The IMF’s Unmet Challenges: Perspectives on Legitimacy and Authority

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A Summary of Barry Eichengreen and Ngaire Woods, The IMF’s Unmet Challenges,
Journal of Economic Perspectives—Volume 30, Number 1—Winter 2015—Pages 29–52
The case of IMF’s (International Monetary Fund) unmet challenges different perspectives of
economists regarding the legitimacy towards both state and GGI (Global Governance
Institution). The different conceptions of legitimacy are entailed with varied perceptions on the
ground that some authors agree the legitimacy is the normative concept or the descriptive
concept to be considered in general. Ian Hurd, defined legitimacy to be the normative believe to
an actor that a rule or an institution is ought to be obeyed. On the other hand, Michael Zurn states
that the legitimacy is the validity of the political decisions or the political order to be legitimate.
Similarly, Stephen Perry says that the concept of legitimacy is the ability of one person to change
the normative situation of the others. All these definitions have limitations pertaining to the
differences of the consideration of legitimacy. With different perceptions and conceptions it is
clear that legitimacy is followed with the authority, one cannot account for the legitimacy
without any account for authority in the political concepts of the markets. The varied definitions
provided by the different authors, “Stephen Perry’s theory of legitimacy is considered by
supplementing the same with Roughan’s account of the public authority.
The concept of right to rule and ought to obey is been perceived as the most common concept of
the legitimacy. Here, right to rule is considered to have the power to issue directives to one
another under the term given authority, it means to have the power to rule over another or to
control. The subjects over whom the authorities are imposed are the obliged to obey the same the
reason being that they are issued by the authorities and they are liable to obey the same without
having any kind of a choice. The right to rule concept of the legitimacy cannot be applied to the

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GGI’s, as these concepts are only valid for the political bodies or the public authorities who issue
directives. As the GGI’s do not work to issue the directives, they are more concerned about the
regulation, norm-creation, and binding contracts to exercise the authority in terms of the
legitimacy.
IMF possess the capacity to issue directives to the ordinary public still the body is not given the
consideration of the ruling in terms of the legitimacy and thus institutions like GGI’s are
deprived of the power of the autonomy to hold the authority of the political orders. The right to
rule and the duty to obey clarifies that the definition of legitimacy connected with the terms of
authority would not provide the GGI’s the authority and the need for their recognition as the
same demands the different conceptions of the legitimacy which the political authority for the
state and GGI’s. A common reason provided for standing at this position proves the
impracticality of applying the general concepts of legitimacy to the global standards. The
concept that the democracy is an inherent component of the powers of the state is the major
misleading conception proving to be the reason for standing at the given position. After this,
many theories of different authors concluded that that the authorities should be separate from the
GGI’s as the mechanisms and the structures of the GGI’S differ from the nation states. This
clears that the right to rule concept is not valid for every group and thus legitimacy should be
considered as the part of authority, which can be applied to all the groups involving the locals,
domestic and the global.
The other term named as the ‘coercion’ is considered as the authority and the coercion are
interrelated to each other specifically to be considered in the nation states. Coercion refers to the

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forms of compulsion or pressure being imposed on someone to signify the authority provided. To
justify the validity of coercion it is submerged with the terms of authority and is considered as
the part of the authority domain’s factor. Roughan further argued that it is not mandatory to
consider coercion as a part of the authority as authority can also be signified with the terms of
power rather than submerging it with coercion. In order to get the alternative ends towards the
normative grounds on GGI is through the application of various theories on authority, power and
leadership. The main theories, which are applied for the same, include the utilitarianism theory
and the deontology theory. Rawlsian social justice is another aspect used to justify the political
authority. The corporate benefit system approves that if that GGI is the legitimate institution if
there is no other such institution carrying out the same functions as the GGI.
The ultimate end or the aim of the political authorities functioning for the nation’s state is the
common good of the public, on the normative grounds of the justification towards the authority
and the legitimacy. This eventually provides the GGI to be the accounted authority for the
common good of the members associated with the same.
The capabilities approach refers to one’s well-being, the approach was provided by the Indian
economists, ‘Amartya Sen’. The list of capabilities includes the life, bodily health, bodily
integrity, senses and emotions the major capabilities to be considered for the legitimacy and the
authority. Considering the critique, the theory was criticized for not having the neutrality, which
according to the Nussbaum is the basic requirement for the political authority. The conclusion
says the authority is legitimate when it has the powers to influence life of others to an extent. The
case of the IMF is the proven example of the authority with legitimacy should focus on the well-
being of the people of the state, as it is the only way for the enhancement of the legitimacy.