IMF Consultations

The 2018 Review of Conditionality and Design of Fund-supported Programs (RoC) is the first comprehensive stocktaking of IMF-supported programs since the global financial crisis. The RoC will evaluate performance in IMF-supported programs between September 2011 and end-2017 and, building on the findings of the previous RoC in 2011 and the 2015 Crisis Program Review, draw lessons for the design of future Fund-supported programs to ensure that they adapt to the evolving needs of the membership.

The RoC will assess how programs are designed, including the mix of adjustment and financing, choice of instrument/facility, and selection of specific policy measures. The RoC will also examine whether the Fund’s Guidelines on Conditionality were implemented consistently across the membership and assess the impact of ownership by the country authorities on program outcomes.

Questions for consultation

The IMF is seeking your views on the scope of its 2018 RoC. The results of this consultation will serve as valuable inputs in assessing IMF conditionality and program design. While we welcome comments on any aspect of the RoC, we are specifically interested in receiving feedback on the following:

• Did Fund-supported programs achieve their objectives? If not, what do you think is the reason?


• Have Fund-supported programs struck the right balance between the needed policy adjustment and conditionality, and the amount of financing, taking into account debt vulnerabilities and countries’ capacity to repay? Are there areas where more conditionality, or less conditionality, would be appropriate?


• Have Fund-supported programs given enough attention to the social impact of program measures, including through coordination with the World Bank and other financing and development partners?


• What role did program ownership play in program design, implementation, and outcomes?
• Have Fund-supported programs struck the right balance between the need to apply similar conditionality across countries with similar characteristics and the need to tailor programs to country circumstances?

How to participate

Interested stakeholders are encouraged to email their responses to the questions above and any other comments to IMFCONSULTATION@imf.org by Friday, June 29, 2018.

Please include the following information when responding via email so that the comments can be registered. Senders may request for their responses and comments to be private.

• Name of the sender
• Organization you represent (if any)
• Country (headquarters)
• Phone number
• E-mail address

A summary of the responses will be posted on our website and included in the final board paper.

Background on Conditionality

When a country borrows from the IMF, its government agrees to implement economic reforms to overcome the problems that led it to seek financial aid from the international community. These loan conditions also serve to ensure that the country will be able to repay the Fund so that the resources can be made available to other members in need.

Designing effective programs

Conditionality in its broad sense covers both the design of IMF-supported programs—that is, the macroeconomic and structural policies—and the specific tools used to monitor progress toward the goals outlined by the country in cooperation with the IMF. Conditionality helps countries solve balance of payments problems without resorting to measures that are harmful to national or international prosperity. At the same time, the measures are meant to safeguard IMF resources by ensuring that the country’s balance of payments will be strong enough to permit it to repay the loan. All conditionality under an IMF-supported program must be either critical to the achievement of macroeconomic program goals or for monitoring implementation, or necessary for the implementation of specific provisions under the IMF’s Articles of Agreement and policies thereunder.

The member country has primary responsibility for selecting, designing, and implementing the policies that will make the IMF-supported program successful. The overarching goal is to restore or maintain balance of payments viability and macroeconomic stability while setting the stage for sustained, high-quality growth and, in low-income countries, for reducing poverty.

How compliance with program conditions is assessed

Most IMF financing is disbursed in installments and linked to demonstrable policy actions. This aims to ensure progress in program implementation and to reduce risks to the IMF’s resources. Program reviews provide a framework for the IMF’s Executive Board to assess periodically whether the IMF-supported program is on track and whether modifications are necessary for achieving the program’s objectives.

The approval of an IMF arrangement or of reviews are based on various policy commitments agreed with the country authorities. These can take different forms:

• Prior actions are measures that a country agrees to take before the IMF’s Executive Board approves financing or completes a review. They ensure that the program has the necessary foundation to succeed, or is put back on track following deviations from agreed policies.


• Quantitative performance criteria (QPCs) are specific and measurable conditions. QPCs always relate to macroeconomic variables under the control of the authorities, such as monetary and credit aggregates, international reserves, fiscal balances, and external borrowing.


• Indicative targets may be established in addition to QPCs as quantitative indicators to assess the member’s progress in meeting the objectives of a program. Sometimes they are also set when QPCs cannot be, because of data uncertainty about economic trends (e.g., for the later months of a program).


• Structural benchmarks are (often non-quantifiable) reform measures that are critical to achieve program goals and are intended as markers to assess program implementation during a review. They vary across programs: examples are measures to improve financial sector operations, build up social safety nets, or strengthen public financial management.

If a QPC is not met, the Executive Board may approve a formal waiver to enable a review to be completed, if it is satisfied that the program will nonetheless be successfully implemented, either because the deviation was minor or temporary, or because the country authorities have taken or will take corrective actions.

Structural benchmarks and indicative targets do not require waivers if they are not met but are assessed in the context of overall program performance. The Fund abolished structural performance criteria, which were subject to the same waiver procedures as QPCs, in 2009.

For further information on principles underlying the design and assessment conditionality in Fund-supported programs, please see:

• Guidelines on Conditionality, September 2002
• Revised Operational Guidance to IMF Staff on the 2002 Conditionality Guidelines, July 2014