Structural Conditionality In Imf Supported Programs
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Structural Conditionality in IMF-Supported Programs
Author: International Monetary Fund. Independent Evaluation Office
language: en
Publisher: International Monetary Fund
Release Date: 2008-04-30
This evaluation examines factors influencing the effectiveness of the IMF structural conditionality in bringing about structural reform. It assesses the impact of the streamlining initiative launched in 2000 and of the 2002 Conditionality Guidelines. These guidelines aimed at reducing the volume and scope of structural conditionality by requiring “parsimony” in the use of conditions and stipulated that conditions must be “critical” to the achievement of the program goals. The evaluation finds that during the period 1995–2004, there was extensive use of structural conditionality in IMF-supported programs, with an average of 17 conditions per program/year.
How to Gain the Most from Structural Conditionality of IMF-Supported Programs
Author: Jochen Andritzky
language: en
Publisher: International Monetary Fund
Release Date: 2021-05-13
Structural conditionality of IMF-supported programs is designed to support structural reforms by countries borrowing from the IMF. Taking stock of program conditions and their implementation, this paper finds that conditionality focuses on fiscal, monetary and financial issues—areas where IMF expertise is strong—and shies away from structural areas such as labor or product market reforms. Hence, tackling deep-rooted structural issues during IMF-supported programs often remained elusive. To ensure countries gain most from IMF conditionality, the paper outlines an evaluation matrix for prioritizing and designing structural reforms, and applies it to case studies.
Growth and Adjustment in IMF-Supported Programs
Author: International Monetary Fund. Independent Evaluation Office
language: en
Publisher: International Monetary Fund
Release Date: 2021-09-09
This evaluation assesses how well IMF-supported programs helped to sustain economic growth while delivering adjustment needed for external viability over the period 2008–19. The evaluation finds that the Fund’s increasing attention to growth in the programs has delivered some positive results. Specifically, it does not find evidence of a consistent bias towards excessive austerity in IMF-supported programs. Indeed, programs have yielded growth benefits relative to a counterfactual of no Fund engagement and boosted post-program growth performance. Notwithstanding these positive findings, program growth outcomes consistently fell short of program projections. Such shortfalls imply less protection of incomes than intended, fuel adjustment fatigue and public opposition to reforms, and jeopardize progress towards external viability. The evaluation examines how different policy instruments were applied to support better growth outcomes while achieving needed adjustment. Fiscal policies typically incorporated growth-friendly measures but with mixed success. Despite some success in promoting reforms and growth, structural conditionalities were of relatively low depth and their potential growth benefits were not fully realized. Use of the exchange rate as a policy tool to support growth and external adjustment during programs was quite limited. Lastly, market debt operations were useful in some cases to restore debt sustainability and renew market access, yet sometimes were too little and too late to deliver the intended benefits. The evaluation concludes that the IMF should seek to further enhance program countries’ capacity to sustain activity while undertaking needed adjustment during the program and to enhance growth prospects beyond the program. Following this conclusion, the report sets out three recommendations aimed at strengthening attention to growth implications of IMF-supported programs, including the social and distributional consequences.