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IMF Conditionality and Country Ownership of Adjustment Programs


  • Mohsin S. Khan
  • Sunil Sharma


This article uses finance and agency theory to establish two key propositions about International Monetary Fund (IMF) conditionality and country ownership of IMF-supported adjustment programs. First, the authors propose that the conditionality attached to these programs is justified. Second, the article hypothesizes that country ownership of these programs is crucial for their success. Because IMF conditionality and country ownership are both necessary, the challenge is designing conditionality that maximizes ownership while providing adequate safeguards for IMF lending. The article analyzes several recent proposals aimed at enhancing country ownership of policies contained in IMF-supported programs. These proposals include encouraging countries to design their own adjustment and reform programs, streamlining structural conditionality, introducing flexibility in the timing of structural policy measures (floating tranche conditionality), and applying conditionality to outcomes rather than policies (outcomes-based conditionality). Copyright 2003, Oxford University Press.

Suggested Citation

  • Mohsin S. Khan & Sunil Sharma, 2003. "IMF Conditionality and Country Ownership of Adjustment Programs," World Bank Research Observer, World Bank Group, vol. 18(2), pages 227-248.
  • Handle: RePEc:oup:wbrobs:v:18:y:2003:i:2:p:227-248

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    References listed on IDEAS

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    Cited by:

    1. Gurgen OHANYAN, 2015. "Recent Changes of IMF Conditionality and Its Effects on Social Spending," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 16(5), pages 591-602, December.
    2. Shim, Ilhyock & Sharma, Sunil & Chami, Ralph, 2008. "A Model of the IMF as a Coinsurance Arrangement," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-41.
    3. C. Randall Henning & Mohsin S. Khan, 2011. "Asia and Global Financial Governance," Working Paper Series WP11-16, Peterson Institute for International Economics.
    4. Oscar Calvo-Gonzalez, 2007. "Ownership and conditionality in IMF-supported programs: Back to Per Jacobsson’s time," The Review of International Organizations, Springer, vol. 2(4), pages 329-343, December.
    5. Temple, Jonathan R.W., 2010. "Aid and Conditionality," Handbook of Development Economics, Elsevier.
    6. Pineau, Pierre-Olivier, 2008. "Electricity sector integration in West Africa," Energy Policy, Elsevier, vol. 36(1), pages 210-223, January.

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