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An Analysis of IMF Conditionality

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  • Ariel Buira

Abstract

Conditionality is the most controversial aspect of the IMF`s policies. It has been said to be intrusive and coercive and considered to disregard effects on growth, employment and income distribution. In the 1990s, following a sharp increase in the number of conditions required by programs, Fund conditionality became increasingly ineffective. The paper reviews the nature and purpose of conditionality; its origin and evolution over time. It considers whether conditionality is required to safeguard the resources of the Fund. It looks into the reasons for the increase in structural conditionality, relates the increase in conditionality with the marked fall in the rate of compliance with Fund programs and with the relative decline in Fund resources. The paper notes the revision of conditionality recently undertaken at the instance of the Managing Director and considers progress on that front. Finally, certain difficult political questions arising from conditionality are posed and some suggestions presented for increasing country ownership of programs, the key to making conditionality more acceptable and effective.

Suggested Citation

  • Ariel Buira, 2002. "An Analysis of IMF Conditionality," Economics Series Working Papers 104, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:104
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    References listed on IDEAS

    as
    1. Morris Goldstein, 2017. "IMF Structural Programs," World Scientific Book Chapters, in: TRADE CURRENCIES AND FINANCE, chapter 16, pages 553-638, World Scientific Publishing Co. Pte. Ltd..
    2. Devesh KAPUR & Richard WEBB, 2000. "Governance-Related Conditionalities Of The International Financial Institutions," G-24 Discussion Papers 6, United Nations Conference on Trade and Development.
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    Cited by:

    1. Philip R. Lane, 2003. "The International Community and the CIS-7," Trinity Economics Papers 20033, Trinity College Dublin, Department of Economics.
    2. Ariel BUIRA, 2003. "An Analysis Of Imf Conditionality," G-24 Discussion Papers 22, United Nations Conference on Trade and Development.

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    More about this item

    Keywords

    International Monetary Fund; conditionality; Balance of Payments Adjustment Stand-by agreements;
    All these keywords.

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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