Politics and IMF Conditionality

IMF Conditionality

This paper presents a principal-agent model of IMF conditional lending, in the aftermath of a “capital-account” liquidity crisis. We show that traditional ex-post conditionality can be e¤ective in safeguarding the Fund’s resources, allowing for the provision of e¢cient emergency lending and reducing ine¢cient ex-ante credit rationing if the capital out‡ow which triggers the crisis is not excess...

External Comments and Contributions on IMF Conditionality

The IMF pretty much argues that all is well with the conditionally contained in the programs it supports and sees no reason to change it. The recent report by the International Financial Institution Advisory Commission in stark contrast argues that conditionality doesn’t work and should be abandoned. Which of them is right? The answer is neither of them. Undoubtedly, IMF conditionality has its ...

Imf Conditionality as a Screening Device*

A theoretical model is developed in which both buybacks and the adoption of an IMF programme can be used as screening devices which enable a creditor to discriminate between debtor countries which are willing to use debt relief in order to invest and repay and countries which are not. Asymmetric information is assumed. This problem can be solved if the country has su¢cient resources to engage i...

The normativity of numbers: World Bank and IMF conditionality

Good governance reforms aim at transforming African state bureaucracies into efficient, transparent, and accountable institutions. These policies are inserted into the national administrative apparatus by means of conditions attached to the financial support of the World Bank and the International Monetary Fund (IMF). Although the conditions exactly match the priorities of these international f...

Evaluation of Structural Conditionality in Imf-supported Programs