IMF programmes — do they work?

International Monetary Fund (IMF) conditionality has been a subject of debate ever since it was introduced in the early 1950s. A number of recent reports have claimed that it has become excessive, and some commentators have suggested that there may be a conditionality Laffer curve with increased conditionality being linked to diminishing effectiveness. ¹ The Meltzer Commission concluded that IMF programmes are 'unwieldy, highly conflictive, time consuming to negotiate and often ineffectual'. With a new Managing Director in place the IMF has itself undertaken a review of conditionality (IMF, 2001). Central to the debate and its implications for policy is the question of whether conditionality and the programmes that embody it 'work'. If they do, why change things? If they do not, then should conditionality be abandoned in its present form, as recommended by the Meltzer Commission, or reformed in some way, and if so, how?