ABSTRACT
The issue of crisis prevention has come powerfully to the fore owing primarily to two aspects of the experience of financial distress of the late 1990s. Traditionally, intervention by the International Monetary Fund (IMF) in support of a country suffering from a crisis in balance of payments is accompanied by conditionality; that is, the actual disbursement of funds in successive tranches is conditional upon the country's implementing an economic programme to restore a sustainable macroeconomic equilibrium. An overhaul of the IMF's functions has, for some time, been a prominent topic of debate among scholars and policy makers. Structural conditionality is not a capricious addition to the IMF's policy toolkit, but stems from the many challenges that the organisation has been required to address since the 1980s. The IMF could also require that countries observe some standards as an essential element of conditionality; that is, it could link the granting of credit to action on financial structures, markets, and corporate governance.
