IMF Conditionality: A Perspective

Abstract

The primary function of the International Monetary Fund (IMF) the most controversial of the Buttonwood twins' is to correct short-term balance of payment problems of member States. Its give confidence to its members by providing them with the opportunity to correct maladjustments in their balance of payment without resorting to measures destructive of national or international prosperity. This paper argues that IMF 'Conditionality' has been one of the pivotal causes in the destabilization of most of the national economies of developing and least developed nations. This is in spite of the express and implied limitations inherent in the Funds constitutional structure against the conditionality policies. This paper also analyses the evolution of conditionality, the impact of these conditionalities on the developing countries and goes on to suggest ways and means to make the IMF Conditionality more democratic and fruitful.

Keywords: IMF, Conditionality, SAP

JEL Classification: K33, F33