The Club of Madrid, a group of 25 former presidents and prime ministers, has released a report on democracy and the International Monetary Fund, the Washington-based global lender. The group says the multi-lateral lender needs to be more democratic in its structure and operations.

The Club of Madrid Tuesday issued a report that is generally supportive of the IMF. It concluded that in three cases it surveyed, Brazil and Poland in the early 90s and South Korea in the late 90s, the fund was helpful in assisting new democratic governments overcome financial distress and economic decline.

But at a conference at the Center for Strategic and International Studies in Washington, participants drew attention to what several called a lack of democracy within the IMF. Jorge Dominguez of Harvard University, said it is indefensible that the 184 member nation monetary fund maintains an informal arrangement that only a European can head the IMF.

"That a European must be the head of the fund is unwarranted by any criterion that the IMF otherwise espouses. This is not a comment on either the incumbent (German national Horst Koehler) or those that have headed it, but rather the procedure itself is the sort of thing the IMF would not endorse with regard to almost any policy in almost any country in the world," he said.

A similar tradition informally requires that an American head the IMF's sister institution, the World Bank. Both international organizations were established in 1944 at a conference of war-time allies in the U.S. state of New Hampshire.

Tom Dawson, the IMF external affairs chief agrees that changes are needed. He called attention to the unequal voting system on the fund's 24 member board in which rich countries have disproportionate power. "First of all, it is absolutely incredible that Brazil's share in the fund is less than that of Belgium's. And that Korea's is less than Denmark's. It makes no economic or financial sense," he said.

Mr. Dawson and others emphasized the degree to which the fund has reversed its policy of relative secrecy and become increasingly transparent in its dealings with member countries. Mr. Dawson said that while the fund has opened itself to scrutiny, many developing countries still refuse to make public the annual assessments of their economies done by the IMF. By contrast almost all advanced economies choose to make their IMF surveys public.