With a review of the executive branch and congressional actions, this book provides the purposes and history of U.S. participation in the multilateral development banks and the relationship between process and goals in the formulation and application of U.S. Foreign policy.

The IMF was created in a world of fixed-parity exchange rates, where most currencies were defined in terms of the U.S. dollar and the dollar was defined in terms of gold. Countries could devalue their currencies only if they were faced with in the original language of Article IV, fundamental disequilibrium in their economy and only if the IMF approved. International capital movements were restricted and cumbersome. That world has now largely disappeared. Since the 1970s, the relative value of most major currencies is determined by world currency markets, and the daily volume of international currency movements far surpasses the volume of currency circulating in most major countries. Article IV was amended in 1976 to replace the fixed-parity exchange rate system with new procedures for enhanced surveillance in the new world of flexible exchange rates.

The International Monetary Fund (IMF), conceived at the Bretton Woods conference in July 1944, has become the focal point of the international monetary system. Created in 1946 with 46 members, it has grown to include 184 countries. The IMF has six purposes that are outlined in Article I of the IMF Articles of Agreement. They are the promotion of international monetary cooperation; the expansion and balanced growth of international trade; exchange rate stability; the elimination of restrictions on the international flow of capital; insuring confidence by making the general resources of the Fund temporarily available to members; and the orderly adjustment of balance of payment (BOP) imbalances.

What is a developing country? How does one know whether a country is actually developing or not? This report looks at this issue from several perspectives. Using a series of reports by various organizations, it shows how countries rank in their levels of development according to different criteria. Countries ranking high according to one measure may rank lower according to another. It was once commonly believed that raising a country's average per capita income level would lead to improvements in most other areas. Time and experience have shown, however, that social conditions and the general well-being of people may not necessarily improve when a country's average income level increases. Countries with relatively high levels of per capita income may rank lower in their social and structural development. By contrast, some poor countries rank with the advanced countries in their governance and levels of individual and economic freedom.

China has a policy of pegging its currency (the yuan) to the U.S. dollar. If the yuan is undervalued against the dollar, there are likely to be both benefits and costs to the U.S. economy. It would mean that imported Chinese goods are cheaper than they would be if the yuan were market determined. This lowers prices for U.S. consumers and diminishes inflationary pressures. It also lowers prices for U.S. firms that use imported inputs (such as parts) in their production, making such firms more competitive. Critics of China's peg point to the large and growing U.S. trade deficit with China as evidence that the yuan is undervalued and harmful to the U.S. economy. The relationship is more complex, for a number of reasons. First, while China runs a large trade surplus with the United States, it runs a significant trade deficit with the rest of the world. Second, an increasing level of Chinese exports are from foreign invested companies in China that have shifted production there to take advantage of China's abundant low cost labour. Third, the deficit masks the fact that China has become one of the fastest growing markets for U.S. exports. Finally, the trade deficit with China accounted for 23% of the sum of total U.S. bilateral trade deficits in 2004, indicating that the overall trade deficit is not caused by the exchange rate policy of one country, but rather the shortfall between U.S. saving and investment. This book presents a coherent examination of the details behind China's currency policies as they relate to outside factors.

What is a developing country? How does one know whether a country is actually developing or not? This book looks at this issue from several perspectives. Using a series of reports by various organisations, it shows how countries rank in their levels of development according to different criteria. Countries ranking high according to one measure may rank lower according to another. It was once commonly believed that raising a country's average per capita income level would lead to improvements in most other areas. Time and experience have shown, however, that social conditions and general well-being of people may not necessarily improve when a country's average income level increases. Countries with high levels of per capita income may rank lower in their social and structural development. By contrast, some poor countries rank with the advanced countries in their governance and levels of individual and economic freedom. This book examines four criteria which are often used today to rank and assess countries' levels of development. They are: per capita income; economic and social structure; social conditions, and; the prevailing level of economic and political freedom. Specific indices or quantitative studies are explained and applied to each criteria and differences among the various measures are explained.