The 2018 Review of Program Design and Conditionality is the first comprehensive stocktaking of Fund lending operations since the global financial crisis. The review assesses program performance between September 2011 and end-2017. Programs during this period were defined by the protracted structural challenges faced by members and hampered by the persistently weak global environment.
The twenty-one contributions in this book assess the controversy surrounding the Fund and provide judgments about the criteria for Fund lending which should help readers understand and analyze both its ongoing role in smoothing adjustment to international payments imbalances and its currently critical position in responding to the debt crisis.
analyzes the changes in conditions placed on International Monetary Fund loans to states over the last fifty years and argues that the changes can be explained by shifts in the sources of the IMF's funding.
With single-digit inflation and substantial financial deepening, developing countries are adopting more flexible and forward-looking monetary policy frameworks and ascribing a greater role to policy interest rates and inflation objectives. While some countries have adopted formal inflation targeting regimes, others have developed frameworks with greater target flexibility to accommodate changing money demand, use of policy rates to signal the monetary policy stance, and implicit inflation targets.
IMF conditionality has been severely criticised by developing countries, who accuse the Fund of unjustly provoking political turmoil and causing poverty. This refers to the policies that a member country is required to follow in order to be able to use the Fund's resources. Conditionality is legally based on the requirement to adopt `adequate safeguards' for the use of resources as stipulated by the IMF's Articles of Agreement. This work focuses on legal implications and policy aspects and, more specifically, on the question of how far-reaching the requirement of `adequate safeguards' may be. Furthermore, the author demonstrates that conditionality is also affected by cooperative arrangements with other institutions, such as the World Bank and United Nations. A major conclusion is that there should be improvements in cooperation and in the monitoring of the application of Fund law on conditionality. Scholars and students who take a deep interest in international economic relations will find this book a unique opportunity to study the legal framework of conditionality. Government officials preparing for negotiations with the Fund will also benefit from reading this work.
The objective of the book is to evaluate critically the ten principles of the Washington Consensus, which govern the conditionality provisions of the IMF and World Bank, and guide the so-called economic reform in developing countries. The book starts with an overview of the Consensus, followed by a chapter on IMF conditionality and how they are related. Since the Consensus is inherently neoliberal, a chapter is devoted to a critique of the free market doctrine and the concept of economic freedom as seen by free marketeers. The ten principles of the Washington Consensus (referred to as the 'ten commandments') are divided into four groups: fiscal reform, interest and exchange rate policies, liberalization of trade and foreign direct investment, and privatization and deregulation (including property rights).The book is written in the normative tradition of what ought to be, as opposed to the positive tradition of what is. While it may be tempting to describe the work as 'polemic', the underlying issues contain such a significant moral component that pretending to be neutral would be a betrayal of justice and morality. In essence, the arguments put forward in the book are intended to dismantle, discredit and debunk a set of principles that are effectively used to loot developing countries.
Program conditionality and ownership are important considerations in the IMF's current rethinking of program design. This paper contributes to the literature by developing a theory of program conditionality and ownership on the basis of Cumulative Prospect Theory. The policymaker may value a set of programs, each with fewer conditions, more than an extended program with as many conditions. This valuation bias is greater in ambiguity (Knightian uncertainty) than under uncertainty. If greater valuation of a program engenders more explicit and implicit ownership, then programs with fewer conditions may have a better chance of success. Less is more.
This paper is part II of a two-volume study conducted as a part of the IMF's ongoing process of evaluating its lending facilities. It focuses on IMF-supported programs and macroeconomic performance during 1988-92, reflecting information available through the end of 1993. Part I (Occasional Paper No. 128) provides an overview of the principal issues and findings and distills the main message for future programs. Part II presents detailed examinations of selected policy issues in five background papers.
Ghana was one of the first African countries to adopt a comprehensive IMF reform program and the one that has sustained adjustment longest. Yet, questions of Ghana's compliance - to what extent did it comply, how did it manage compliance, what patterns of non-compliance existed, and why? - have not been systematically investigated and remain poorly understood. This book argues that understanding the domestic political environment is crucial in explaining why compliance, or the lack thereof, occurs. Akonor maintains that compliance with IMF conditionality in Ghana has had high political costs and thus, non-compliance occurred once the political survival of a regime was at stake.
An IMF paper reviewing the policy responses of Indonesia, Korea and Thailand to the 1997 Asian crisis, comparing the actions of these three countries with those of Malaysia and the Philippines. Although all judgements are still tentative, important lessons can be learned from the experiences of the last two years.
