Public choice analysis has clearly demonstrated the need to consider the roles of rent seeking and bureaucratic self-interest in influencing the international economic policies of national governments and the behaviour of international organisations. We have reached a stage, however, where more attention needs to be paid to the nature of bureaucratic incentives and the degree of discretion that bureaucracies have under different circumstances. It is suggested that the incentives for budget maximisation are likely to vary substantially from one institution to another. Specifically such incentives seem likely to be much stronger for the World Bank than fot the IMF. The evidence presented by Rolanf Vaubel for budget maximisation by the IMF is critically examined and it is argued that much of this evidence is equally constant with other hypotheses. Thus there is a need for more research on the political economy of the international financial institutions. Copyright Blackwell Publishers Ltd 2001.