ABSTRACT
This chapter focuses on one of the most controversial and significant aspects of International Monetary Fund (IMF) decision-making: the application of "conditionality" to "upper-tranche" loans. The functionalist model of IMF decision-making is dominated by a conception of the Fund as the depository of economic rationality in the area of international finance. Marty, if not most, analysts of the IMF single out the political forces that are posited as surrounding and penetrating the institution as the most important factor in IMF decision-making. The Fund, rather than acting as the international economic physician, has more strategic objectives, according to the political model. Both the functionalist and political models are based on what Ascher refers to as "first principles/' meaning that they rely on an essentially unidirectional line of causality with very little dynamic interaction. According to the bargaining model, a confrontational strategy, employed either by the Fund or the borrower, could be expected to yield very different results than a conciliatory one.
