Essay on The International Monetary Fund ( Imf )

730 Words Apr 19th, 2016 3 Pages
The International Monetary Fund (IMF) is often thought of an institution with formal rules and procedures that guide its lending decisions based on severity of the economic problems facing borrowing countries. However, in his paper, “The Scope of IMF Conditionality”, Stone argued that the IMF is also a political organization with countries like the US intervening in lending decisions through informal processes to further their geopolitical and financial interests. To Stone, the continuous US interference has led to a “crisis of legitimacy in the IMF”. The main contribution of this paper to the larger scope of literature in relation to conditionality is the methodology as well as the organization of its variables. Although I agree with Stone that the US interferes to safeguard its own interests, but I do not see sufficient evidence/arguments to reach to the conclusion that the US has led to crisis of legitimacy in the IMF.
The paper itself lacks in its theoretical development of the issue. There are a great many footnotes that attempt to show the logic that leads to the points of view on conditionality, but it is never clearly stated. Furthermore, the US intervention alone does not fully explain the variation in the IMF conditionality. There are other avenues that contribute to differences in loan conditions. One such is the role of Fund staff, which enjoys considerable autonomy during the negotiation, design, and proposal of fund loans. The staff prefer the scope of…

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