July 18, 2014 11:33 am

A peek into the IMF machine

Ahamed lifts the lid on the subtle symbols that signal hierarchy, tribal affiliation and power

A couple of years ago, Liaquat Ahamed, a Washington-based fund manager turned writer, flew to Tokyo to participate in the annual meeting of the International Monetary Fund. It was a febrile moment for the global economy: the eurozone region was on the brink of a crisis, and speculation was sky-high about what the Fund should (or should not) do.

But unlike the other 12,000 delegates who typically attend such meetings, Ahamed was not lobbying for policies, cutting business deals or reporting. Instead, for a few days he observed the IMF circus as if he were an ethnographer plunged into a strange tribe – or a botanist planted in a jungle. Then he travelled to Mozambique and Ireland to watch IMF missions at work. This was not to evaluate the efficacy of IMF programmes but simply to see how the Fund’s staff interacted with each other and local officials as human beings, within the dizzy cross-cultural kaleidoscope of encounters.

The results, published this month in a monograph, Money and Tough Love: On Tour with the IMF , are not just hilarious but shrewdly provocative. These days, as I observed in last week’s column, the issue of globalisation is more emotive than ever. As Ian Goldin, the Oxford-based economist (and a former World Bank official himself) notes in The Butterfly Defect, another thought-provoking new book, “The tidal wave of globalisation that has engulfed the planet in the past two decades has brought unprecedented opportunity. But it has also brought new risks that threaten to overwhelm us.” Financial crises – of the sort the IMF was created to contain – are just one case in point.

An illustration of a man looking into a machine©Shonagh Rae

But while this means that the question of international governance is also becoming more important, what is striking is how little on-the-ground ethnographic research has been done into organisations that try to implement this. In the wake of the Great Financial Crisis there has been a plethora of books that offer blow-by-blow accounts of what happened inside banks before and after the meltdown. There have also been some fly-on-the-wall accounts of what occurred inside national finance ministries, central banks and regulatory agencies, often written by officials themselves (Timothy Geithner’s Stress Test is simply the latest in this genre). But there are almost no inside accounts of what happens when central bankers congregate for international meetings at the Bank for International Settlements in Basel, or when finance ministers and others gather at the IMF or World Bank.

It is not difficult to work out why. Institutions such as the IMF are generally terrified of letting outsiders peer too closely inside, and Ahamed probably only received permission to do this research because his last book, Lords of Finance, was a weighty, prize-winning tome. Even with these credentials, Ahamed could only peek into the more sanitised edges of the IMF machine.

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Gillian Tett

But even this limited glimpse is fascinating, because Ahamed lifts the lid on seemingly irrelevant details about the fabric and rhythm of IMF life and on the myriad subtle cultural symbols that are used to signal hierarchy, tribal affiliation and power – and which the IMF economists themselves almost never talk about. Ahamed describes, for example, the dress code patterns, noting that “the men [at IMF meetings are] uniformly dressed in dark suits and ties, apart, that is, for two groups: the Iranians, who have this odd habit of buttoning up their collars but refusing to wear ties, and the hedge fund managers, who [are] young, fit and wear designer suits…[they] no doubt refuse to wear ties for much the same reason as the Iranians – to signal their rather self-conscious freedom from arbitrary social conventions.”

. . .

He also tries to explain how policy ideas emerge to dominate the debate – via media platforms. In the case of the Tokyo meeting, for example, he details how the issue of austerity took centre stage, even amid linguistic confusion. “When someone asked the panel why, in view of the costs exacted by fiscal austerity on the social fabric of the countries in crisis, it did not make sense to go slow on budget cuts,” he writes, “[Jörg] Asmussen tried the following comparison: if you plan to cut off a cat’s tail, better to do it in one fell swoop, rather than in slices. This left the half-Japanese audience quite bewildered: why would anyone want to cut off the tail of a cat in the first place?”

Of course, while his account is deliciously droll, this mass of observation reveals a serious point. Although policy makers and economists might like to pretend that international governance is all about abstract ideas or quantitative models, it is actually rooted in complex cultural patterns and languages that outsiders struggle to understand. That is no surprise; all institutions have such traits. But I just hope that the experiment that Ahamed has started will now open the door to other ethnographic accounts of how our huge cross-border bureaucracies really work – not simply to spark more reflection among voters but also among the staff of groups such as the IMF too.

gillian.tett@ft.com

Illustration by Shonagh Rae

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