برنامه های صندوق بین المللی پول: آیا این برنامه ها کارایی بهتری دارند؟

A central issue in the debate about a new international financial architecture has been whether programs of policy reform supported by the International Monetary Fund work. The Fund claims that “on balance” they do, because of their positive effect on the balance of payments. Others claim that programs are ineffective, and suggest that they should be discontinued. This paper reviews the econometric evidence dealing with the macroeconomic effects of IMF programs. It goes on to provide additional evidence and judges success against alternative criteria. Although the record is not good, the paper argues that it would be unwise for the Fund to cease lending and to abandon conditionality altogether. IMF programs need to be redesigned and refocused. The paper concludes by identifying a number of principles that should underpin reform.

International Monetary Fund (IMF) conditionality has been a subject of debate ever since it was introduced in the early 1950s. A number of recent reports have claimed that it has become excessive, and some commentators have suggested that there may be a conditionality Laffer curve with increased conditionality being linked to diminishing effectiveness.1 The Meltzer Commission concluded that IMF programs are “unwieldy, highly conflictive, time consuming to negotiate and often ineffectual.” With a new Managing Director in place the IMF has itself undertaken a review of conditionality (IMF, 2001). Central to the debate and its implications for policy is the question of whether conditionality and the programs that embody it “work.” If they do, why change things? If they do not, then should conditionality be abandoned in its present form, as recommended by the Meltzer Commission, or reformed in some way, and if so, how? This raises the fundamental question of how to judge whether IMF programs work.2 A narrow criterion is to focus on their balance-of-payments effects. After all, the IMF is primarily a balance-of-payments institution. With this focus in mind a recent survey of the crosscountry evidence conducted by the IMF (ul Haque & Khan, 1998) claims that its programs do indeed “on balance” work. This criterion may be broadened to include the effects of programs on other additional macroeconomic outcomes such as economic growth and inflation. There is a relatively large literature that assesses conditionality in this way. The literature also encompasses studies that examine the effects of IMF programs on intermediate policy targets such as fiscal deficits, monetary growth and the exchange rate. Very little attention has been paid, however, to other potential indicators of success or failure, which move beyond the macroeconomic effects of IMF programs. The purpose of this paper is to identify these other indicators so that a broader definition of the concept of “work” may be offered, and to see what the evidence reveals using this definition. The findings may also give a clue as to the direction in which reforms to conditionality should go. The paper only seeks, however, to be indicative rather than definitive. The layout of the paper is as follows. Section 2 undertakes a brief review of the existing literature on the effects of IMF programs. Rather than being comprehensive, it sets out to establish broad areas of consensus and to summarize what we know. Against this background, Section 3 extends the criteria by which the effects of IMF programs may be judged. It does this by identifying institutional objectives and examining the degree to which conditionality as currently practiced has enabled these objectives to be realized. If the objectives are achieved this is taken to indicate that Fund programs “work.” If they are not, then a less positive conclusion seems justified. Section 4 draws on the available empirical evidence combining that from the existing literature with the additional evidence presented here to discuss the implications for policy. By isolating possible shortcomings in the design of conditionality it attempts to identify areas for reform. Finally, Section 5 offers a summary and some concluding remarks about the current debate surrounding conditionality in the light of the analysis undertaken in this paper.

As part of a general discussion of the international financial architecture and the role of the IMF there is an on-going debate about IMF conditionality. Much of this debate is founded on an assessment of whether IMF programs work. If they do not, there may be little need to reform conditionality. If they do not then perhaps, as the Meltzer Commission suggests, it would be a good idea to abandon conditionality, at least in its current form. This paper has demonstrated that there is no single and unique definition of “work.” Traditionally the question has been approached by assessing the effects of IMF programs on macroeconomic policies and final outcomes. A mixed picture emerges, however, and fundamental issues still remain to be resolved. If some programs work better than others according to this criterion, why? To what extent does the success of a program depend on the degree of policy implementation, and does this itself depend on the amount of financing provided by the Fund? A different approach is to identify other additional indicators of success and failure. This has been the approach adopted here with criteria being selected on the basis of the IMF's own institutional objectives. High rates of recidivism, low rates of completion, and an insignificant catalytic effect on other capital flows are presented as evidence that IMF programs and the related conditionality do not work in the way intended; or more accurately, often do not work. Can they be made to work better? Abandoning conditionality altogether in circumstances where the Fund continues to make loans would encounter moral hazard problems. Substituting preconditions completely for conventional conditionality would preclude the Fund from offering assistance in circumstances where its own Articles suggest it should be lending. That leaves reforming conditionality in other ways. Without recommending a specific set of reforms this paper suggests that reform needs to be aimed at rectifying the deficiencies identified. Reform should therefore focus on reducing recidivism, increasing the rate of completion and strengthening catalysis. This implies a broader discussion encompassing the design of adjustment and its intertemporal pattern, the size of external financing, and the political economy of policy reform. These are interrelated issues. A concern is that the on-going debate over conditionality may assume a narrower perspective concentrating on “mission creep” and the extent to which conditionality has become excessive. Although not without benefit, such a debate may fail to draw attention to all the issues that need to be considered in attempting to improve the performance of IMF programs in the future.