ABSTRACT
Financial crises during the 1990s and early 2000s have placed the International Monetary Fund (IMF) - the world's premier international financial institution (IFI) - under the spot light. A number of high-level reports have been produced examining the international financial architecture in general and the IFIs in particular, but these represent only a small proportion of the academic and 'popular' commentary that there has been about the Fund. 1 The discussion has ranged over many aspects of the Fund's operations, including 'mission creep', conditionality and organizational structure. Some observers have suggested that the Fund has extended its role well beyond the one for which it was originally intended and designed. According to this view, the Fund has encroached into the territory of the World Bank and has become excessively engaged in issues of long-term economic development and structural reform as opposed to short-term balance of payments (BoP) financing and adjustment. Reflecting this, it is pointed out that conditionality has increased to include detailed policy commitments relating to the microeconomy as well as trade and investment, in addition to its conventional macroeconomic components, monetary policy, fiscal policy and exchange rate policy. It has also been claimed that there are important political dimensions involved in conditionality. Since the Fund's organizational structure means that its decision making is dominated by the 'advanced' economies, and in particular by the United States, a related suggestion has been that Fund conditionality has been used as a conduit for forcing the developing and emerging economies that are the Fund's clients to pursue policies which favour the richer economies. 2
