Unifying EU Representation at the IMF Executive Board: A Voting and Veto Power Analysis

Brandner, Peter; Grech, Harald and Paterson, Iain (November 2009) Unifying EU Representation at the IMF Executive Board: A Voting and Veto Power Analysis. Former Series > Working Paper Series > IHS Economics Series 245


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Abstract: The consequences of consolidating EU representation at the IMF Executive Board by regrouping the 27 Member States into two EU constituencies, euro area and non-euro area, are discussed. In particular we contrast voting power as proposed byPenrose-Banzhaf (PBI) and Shapley-Shubik (SSI), and other respectively related measures of blocking (or veto) power and decision efficiency as proposed by Coleman and Paterson. Hitherto, IMF-specific literature is PBI-based. However, theoretical reasons and empirical plausibility arguments for the SSI are compelling. The (SSI) voting power of the two large constituencies - U.S.A. and euro area - reflects their corresponding voting shares over a range of majority thresholds, whereas PBI voting power reduces to only half of vote share at the majority threshold of 85% needed for some Executive Board decisions. SSI-related estimates of veto power are generally lower than the Coleman indices. Correspondingly, the efficiency of collective decision-making is considerably underestimated by the Coleman measure.;

Item Type: IHS Series
Keywords: 'International Monetary Fund' 'European Union' 'Voting power analysis' 'Veto power'
Classification Codes (e.g. JEL): C71, D71
Date Deposited: 26 Sep 2014 10:39
Last Modified: 26 Sep 2019 16:33
ISBN: 1605-7996
URI: https://irihs.ihs.ac.at/id/eprint/1961

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