ABSTRACT
The international monetary fund (IMF) imposes conditions on countries making drawings on their facilities. The conditions are more formal and more stringent for drawings on upper credit tranches. The actual conditions in a programme are determined in the light of these objectives plus a set of beliefs – on the part of Fund officials – about economic causality. The conditions involved in World Bank structural adjustment loans are thus complementary to IMF conditions, with similar types of policies, but they aim to achieve longer-run changes and are less concerned with short-run demand management, though the programmes do contain references to the need for IMF-type demand management. The less developed countries reaction to conditionality is based on a perception of the causes of their balance of payments disequilibrium, which is different from the orthodox IMF approach. The IMF has been identified with a particular world view and an interest in revolving its finance in a short period.
