ABSTRACT
This chapter examines conditionality as a mutual commitment and learning process. It proposes different forms of conditionality tailored to countries at different levels of ownership and phases of a long-term reform process ex-post tranching for established reformers with a track record, floating tranches for credible reformers aiming to establish a track record, regular tranching, and an experimental single up-front tranche or continued Bank engagement through advisory and technical assistance for new or less credible reformers. The chapter explores the links between conditionality, ownership, and participation, and propose ways to asses ownership and tailor conditionality to increased ownership and participation. It describes the empirical evidence of successful adjustment lending: higher impact adjustment lending, reevaluation of the David Dollar and Jakob Svensson data on the political economy of reform, and ten country case studies of aid and reform in Africa. The chapter deals with the recent proposals to streamline conditionality at the International Monetary Fund, which move towards the new modalities.
