IMF Conditionality

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The International Monetary Fund (IMF) has been assigned a critical role in responding to the international debt crisis. The terms on which the IMF extends its credits, however, have been controversial for many years. The charges include allegations that the Fund is insensitive to local conditions, oblivious to national sovereignty, ideologically biased in favor of market-oriented approaches and wedded to dogmatic monetarism. More recently, the U.S. administration had suggested that the Fund has "gone soft," approving programs without hope of lasting adjustment, overextending itself, exhibiting bias against freemarket solutions, and moving too quickly into countries that could borrow from commercial banks instead.

The twenty-one contributions in this book, by Irving Friedman, Bela Balassa, Edmar Bacha, and others assess the controversy surrounding the Fund and provide judgments about the criteria for Fund lending which should help readers understand and analyze both its ongoing role in smoothing adjustment to international payments imbalances and its currently critical position in responding to the debt crisis. The book includes eleven country studies.

John Williamson is a Senior Fellow at the Institute and has been a professor of economics at major universities in the United States, the United Kingdom, and Brazil, as well as Economic Consultant to the U.K. Treasury and Advisor to the IMF.