Review of IMF Conditionality: Lessons on the Design and Effects of IMF-Supported Programs
02 May 2013 4:00 pm
Ranil Salgado, Marshall Mills, Hans Weisfeld (all IMF)
wiiw, Rahlgasse 3, 1060 Vienna, lecture hall (entrance from the ground floor)
The IMF recently completed a periodic review of the conditionality, design and outcomes of its lending programs, the first in 7 years. Examining more than 150 programs over the period 2002-11, the review found that program conditionality was generally appropriately streamlined, even-handed, and tailored to country needs. Programs generally met their objectives and in particular had positive impacts on inflation and fiscal balances (based on use of a statistical matching technique). Also, social spending was largely protected, and the overshooting current account adjustments seen in some programs during the 1990s were avoided. However, the review also warned of challenges in programs in countries with high debt levels. Recommendations are that programs should offer more discussion of alternative policy options, greater consideration of “social” and “jobs and inclusive growth” issues, more effective collaboration with other international organizations, and enhanced analysis of risks to program success.