Babb, Sarah. 2003. “The IMF in Sociological Perspective: A Tale of Organizational Slippage.” Studies in Comparative International Development. 38(2):3-27.
Babb disagrees with Stiglitz's analysis of "what went wrong" with the IMF. He traces the problem to the early 1980s. She says it started long before that.
Babb uses organizational sociology to analyze the IMF as an organization. She begins with the IMF's founding and its vague mission. It's common for a multilateral, international organization such as this to have a vague mission because it's difficult to get so many different parties to agree to something more specific. She also mentions that it's difficult to enforce international law, so countries might be hesitate to commit to something specific that cannot be enforced.
In this case, Keynes was on the British side arguing for something vastly different (Keynesian, in fact) from what the Americans wanted. While one might imagine that Keynes was arguing for his own brand of economics (as he was) simply because that's what he believed in, Babb points out that the U.S. and Great Britain had different interests, and each side was arguing for their own interests. The U.S. wanted "conditionality" and Great Britain did not. Conditionality refers to imposing conditions on nations receiving IMF loans. The resulting agreement did not mention conditionality.
Yet, conditionality became a part of the IMF's loans early on in its history. Babb looks to three possible sources of what shaped the organization given its weak and vague mission: coercive powerful outside forces, mimicking similar organizations ("mimetic isomorphism"), and the norms of the staff.
The powerful outside force she considers is the U.S. Treasury. This is an example of "asymmetric dependence." The original Bretton Woods agreement stated that all nations would peg their currencies to the dollar, and the dollar could be exchanged for gold. This eventually fell apart decades later, but the dollar continued to be important. Plus the U.S. had the most votes in the Executive Board and the only effective veto. Given that the U.S. and specifically its Treasury held more power over the IMF than the other way around, the U.S. and specifically the U.S. Treasury were an influential force in guiding IMF policy.
As for mimetic isomorphism, it was difficult for the IMF to pattern itself after similar organizations when no similar organizations existed. The IMF was simply the only IMF in the world, in all of history. However, there was a precedent of banking institutions dating back to the 19th century under the gold standard. Back then, when a nation ran into a balance of payments crisis, it was common for other nations to lend them money to resolve the crisis. Those loans came with conditions, setting a precedent for conditionality.
The last point is patterning the organization after the norms of the staff. Indeed, the leadership often deferred to the views of the staff, both because the staff would hand them already finished agreements that they had to vote yes or no on, and sending an agreement back to the drawing board would slow things down. Given that loans were often given in a crisis situation and timeliness was important, this was not ideal. Also, the staff often had expertise that the Executive Board often did not. So the Executive Board gave the staff quite a bit of freedom.
The staff were mostly economists, and they followed the norms of their profession. But that's not all. The reason why the IMF's policy resembles gold standard-era pre-Keynesian economics is because it was gold standard-era pre-Keynesian economists who staffed the IMF. At the time, the Keynesian model was new and unfamiliar. The old way had decades, if not centuries of precedent. What's more, when Keynesian economic won the day in the Great Depression, economists who still bought into pre-Keynesian economics more or less hid out in central banks. When the IMF was created, they gravitated there.
During the IMF's formative years, it was run by these economists. They basically hid out in the IMF until the rest of the world came around to their way of thinking via the Washington Consensus. Babb writes, "Indeed, we might even say that the IMF became a think tank within which the old-fashioned, deflationary thinking of the gold standard was preserved, until it was resuscitated in the 1980s as a tenet of the Washington Consensus" (p. 22).
This wouldn't be quite so problematic if pre-Keynesian Gold Standard economics and the neoliberal economics that came after it were correct and Keynes was wrong but, alas, it is the other way around.