Conditionality and Design of IMF-supported Programmes

91 Pages Posted: 17 Oct 2019

See all articles by Marco Committeri

Marco Committeri

Banca d'Italia

Pilar L´Hotellerie-Fallois

Banco de España

Monica Algarra

Banque de France

Irina Balteanu

Banco de España

Carlijn Eijking

De Nederlandsche Bank

Julia Estefanía

Banco de España

Sonsoles Gallego Herrero

Banco de España

Serena Garelli

Banque Generale du Luxembourg (BGL)

Heather D. Gibson

Bank of Greece

Robert Heinbuecher

Deutsche Bundesbank

Caroline Janssens

National Bank of Belgium

Tobias Krahnke

Deutsche Bundesbank

Christina Lerner

Oesterreichische Nationalbank (OeNB)

Michelle O’Donnell Keating

Central Bank of Ireland

Xavier Serra

Banco de España

Alessandro Schiavone

Bank of Italy

Luc Stevens

National Bank of Belgium

Melina Vasardani

Bank of Greece

Benjamin Vonessen

European Central Bank (ECB)

Date Written: October, 2019

Abstract

Conditionality is at the very heart of IMF lending and has been the subject of intense debates ever since the Fund’s inception. Its success is of crucial importance not only for countries’ chances of achieving the goals of IMF lending programmes, but also for the credibility of the Fund as a trusted adviser. This report provides information and a set of facts on the IMF arrangements approved after the global financial crisis, with a focus on ex post conditionality and on arrangements primarily financed through the General Resources Account (GRA). The analysis shows that between 2008 and 2018, the characteristics of IMF programmes evolved with the macroeconomic context; in particular, a tendency towards more structural conditionality and longer programme implementation horizons has emerged. In the aftermath of an IMF programme, all relevant macroeconomic variables tend to improve compared with the pre-programme period; in particular, external and fiscal positions improve considerably and growth typically rebounds, inflation declines and net private capital inflows stabilise or recover slightly. However, the improvement has generally fallen short of expectations, especially in terms of GDP growth and debt reduction. One area in which the effectiveness of IMF programmes has proven less than satisfactory is with serial borrowers, i.e. countries that fail to graduate from IMF financial assistance in due course. This highlights the importance of further analysing the factors behind the success of IMF programmes and points, inter alia, to the need to design and sequence the structural conditions attached to Fund loans more effectively.

Keywords: IMF conditionality, IMF programmes, International Monetary Fund

JEL Classification: F3, F5

Suggested Citation

Committeri, Marco and L´Hotellerie-Fallois, Pilar and Algarra, Monica and Balteanu, Irina and Eijking, Carlijn and Estefanía, Julia and Gallego Herrero, Sonsoles and Garelli, Serena and Gibson, Heather D. and Heinbuecher, Robert and Janssens, Caroline and Krahnke, Tobias and Lerner, Christina and Keating, Michelle O’Donnell and Serra, Xavier and Schiavone, Alessandro and Stevens, Luc and Vasardani, Melina and Vonessen, Benjamin, Conditionality and Design of IMF-supported Programmes (October, 2019). ECB Occasional Paper No. 235. Available at SSRN: https://ssrn.com/abstract=3471252

Marco Committeri (Contact Author)

Banca d'Italia ( email )

Via Nazionale 91
Rome, 00184
Italy

Pilar L´Hotellerie-Fallois

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Monica Algarra

Banque de France ( email )

Paris
France

Irina Balteanu

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Carlijn Eijking

De Nederlandsche Bank ( email )

Netherlands

Julia Estefanía

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Sonsoles Gallego Herrero

Banco de España ( email )

Madrid 28014
Spain

Serena Garelli

Banque Generale du Luxembourg (BGL) ( email )

Luxembourg
Luxembourg

Heather D. Gibson

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens
Greece

Robert Heinbuecher

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Caroline Janssens

National Bank of Belgium ( email )

Brussels, B-1000
Belgium

Tobias Krahnke

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Christina Lerner

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

Michelle O’Donnell Keating

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

Xavier Serra

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

HOME PAGE: http://www.bde.es/

Alessandro Schiavone

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Luc Stevens

National Bank of Belgium ( email )

Brussels, B-1000
Belgium

Melina Vasardani

Bank of Greece ( email )

21 E. Venizelos Avenue
GR 102 50 Athens
Greece

Benjamin Vonessen

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
16
Abstract Views
112
PlumX Metrics