ABSTRACT
When a state joins the International Monetary Fund (IMF) and the World Bank it accepts certain obligations to bring external considerations into its internal policymaking. At the very least, members of the Fund are bound to submit to a formal apparatus of surveillance over the economic consequences for other members of a full range of macroeconomic policies. When they accept financial assistance from the Fund or the Bank, moreover, the nature and scope of the obligations assumed can expand significantly. “Conditionality” is the term used to describe the practice of establishing those obligations and promoting compliance. The conferees at Bretton Woods in 1944 did not invent the practice, but the two institutions they helped establish later proved eminently adaptable. Since the 1970s, members have enlarged the scope of conditionality in both institutions and used it to encourage ever deeper adjustments in a wider range of policies. Members requiring high levels of financial assistance over long periods of time have found themselves drawn into an elaborate practice now commonly labeled “structural conditionality.” The practice rendered such assistance conditional on negotiating and agreeing to implement plans for profound reform and adjustment in important national systems affecting economic stability and prospects for future prosperity. Since the boundary lines between the economic, political, and social realms blur at this level, structural conditionality has sparked intense controversy.
