The IMF’s 2018 Stand-By Arrangement with Argentina: An Ultra Vires Act?

38 Pages Posted: 7 Mar 2022

Date Written: January 10, 2022


The 36-month exceptional access Stand-By Arrangement (SBA) with the Republic of Argentina approved by the International Monetary Fund (IMF) in June 2018, later augmented in October 2018, represents the largest programme in the history of the Fund. The programme, however, has failed in all its core objectives. While the programme has been subject to macroeconomic critiques, this is the first study that integrates such analyses into a comprehensive legal evaluation, with resort to general Public International Law, the law of the IMF and, where international law is uncertain, relevant analogies with English private law.

We introduce the hypothesis that the SBA violated the core purposes of the IMF as per its Articles of Agreement and, therefore, constitutes an ultra vires act. To explain why, we proceed as follows. Section 1 provides the legal foundations of our analysis. First, it explains the ultra vires doctrine in international law and outlines key considerations drawn from case law of the International Court of Justice for the recognition of ultra vires acts. Second, it draws on core provisions of the Articles of Agreement to discuss relevant purposes of the IMF, as well as a set of authorisations and limitations to its powers established in the treaty to achieve such purposes. Section 2 draws on macroeconomics to discuss how those substantive rules were violated in the SBA in a way that is too manifest to be open to reasonable doubt, thereby raising suspicion that the SBA’s approval was ultra vires. In particular, the programme was characterized by egregious assumptions and accounting inconsistencies that meant the objectives were impossible to attain. Section 3 considers the impact of the IMF’s recently published Ex-Post Evaluation of Exceptional Access Under the SBA on our legal analysis. Section 4 draws on the premise that the SBA’s approval constituted an ultra vires act to discuss the potential legal implications of its invalidity. Section 5 concludes this piece by summarising its key findings and reflecting upon the need for clarification on the legal validity of the SBA, as well as further scholarly research on ultra vires lending by the IMF.

Keywords: Law & Macroeconomics; Public International Law; Ultra Vires; International Monetary Fund; Argentina

JEL Classification: K; K33; F33; F34; F53; F55

Suggested Citation

Patricio Ferreira Lima, Karina and Marsh, Chris, The IMF’s 2018 Stand-By Arrangement with Argentina: An Ultra Vires Act? (January 10, 2022). Available at SSRN: or

Karina Patricio Ferreira Lima

School of Law, University of Leeds ( email )

Leeds LS2 9JT
United Kingdom

HOME PAGE: http://

Chris Marsh (Contact Author)

Exante Data ( email )

United States

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