Accomplishments and limitations of the recent reforms in the IMF’s lending facilities and conditionality. Results of the empirical evidence

NEMIÑA, PABLO

Copenhague, Dinamarca

Conferencia; Conference on Reforming the Bretton Woods Institutions; 2009

Danish Institute for International Studies and the Danish Foreign Ministry

While the International Monetary Fund (IMF) has been ratified as the responsible for ensuring international financial stability, it undertook a reform to adapt its operation to the new requirements. Through this recent reform, which includes the enhancement of the credit lines and the revision of the guidelines on conditionality, it seeks to answer the criticisms which claimed to increase the available resources in line with current needs, and to reduce interfering in the political decision making processes of member countries through the imposition of structural conditionalities.However, questions arises about whether we are facing a new IMF, which promotes countercyclical policies and limits its interference in the internal policy process of the member countries, or it is an slightly updated version that maintains the same form and orientation of its monitoring mechanisms and recommendations of economic policy.To answer this question there are analyzed the 20 agreements granted under the Stand-By and Flexible Credit Line during the eleven months elapsed since the outbreak of the financial crisis to consider its duration, the magnitude and schedule of the disbursements committed, and the conditionalities required. Then there are compared the results before and after the reform.It is proposed as a hypothesis that while the reforms have achieved in augmenting the credits  magnitude and focusing the conditionalities in its core areas, it have not succeeded in establishing remarkable changes to the political economy orientation thereof. This is verified on the fact that although the scope of conditionalities has been narrowed, the Fund has increased the emphasis on compliance of preconditions oriented to public expenditure adjustments, which reproduces -in tougher way- requirements with a similar orthodox orientation to those before the reform.