Is the IMF Conditionality Anachronistic?

Francis N. Botchway

The conditions that the International Monetary Fund (IMF) attaches to its assistance to countries have long been debated. The Fund responded with minor modifications, but in the main held firm on set conditionality. In the face of the gigantic measures being taken by governments all over the world to address the current economic crisis, this paper asks if the well-known conditionalities of exchange liberalisation, trade liberalisation, public expenditure reform and privatisation are outdated. In the larger scheme of events, the question is asked: what role can the IMF play in the current crisis? The paper argues that in the short term there is no alternative institution with the requisite experience to effectively organise solutions to the crisis. In the long term, the centres of knowledge and operations of the IMF will have to diversify.

Law and Financial Markets Review, Vol. 3, No. 4, July 2009: 368-376. 

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