Policy Papers
2012
June 19, 2012
2011 Review of Conditionality - Overview Paper
Description: The review generally yields positive findings on conditionality and design in Fund-supported programs. Programs in the review period internalized lessons from the past, for example with program design incorporating the lessons of the Asian crisis, and the approach to conditionality being modified to take into account the recommendations made in the 2007 report on structural conditionality by the Fund’s Independent Evaluation Office (IEO). (Box 1 also summarizes recommendations from the previous Review of Conditionality and follow-up.) These findings hold for the substantial majority of programs supported under both the Fund’s General Resources Account and the Poverty Reduction and Growth Trust (hereafter GRA programs and PRGT programs, respectively).
June 18, 2012
2011 Review of Conditionality - Design of Fund-Supported Programs
Description: Design of Fund-supported programs aims to address country specific needs while remaining even-handed and consistent with Fund policy. This paper examines the extent to which program design and conditionality have been appropriate in pursuing these goals, by seeking to answer several questions: has program design been consistent and evenhanded; has it addressed country specific needs and objectives appropriately; has it been based on reasonably good macroeconomic projections; and has it been flexible in the face of evolving country circumstances. The description and analysis focuses on the period between 2006 and September 2011, with some attention to the 2002-05 period.
June 18, 2012
2011 Review of Conditionality - Technical Appendices
Description: This section provides the background studies relating to dimensions of Fund policy on conditionality. Appendix 1 provides a review of Fund experience with coordination, both in a low-income country (LIC) setting (in African programs) and in an emerging market and advanced economy setting in the European Union (EU) and Euro Area (EA). Appendix 2 summarizes the recent changes to debt limits in LICs and provides an assessment of the implementation of this policy in the early stages (up to mid-February 2011). Appendix 3 reviews the experience of countries with the Flexible Credit Line (FCL) and Precautionary Credit Line (PCL)-supported programs. Appendix 4 examines the impact of the 2009 Special Drawing Rights (SDR) allocation on program design.
June 18, 2012
2011 Review of Conditionality - Content and Application of Conditionality
Description: This paper reviews the design of conditionality in Fund-supported programs from 2002 to end-September 2011, with an emphasis on recent years. It focuses on the content and application of program conditionality—especially structural conditionality—in relation to the 2002 Conditionality Guidelines (the "Guidelines"), the Staff Statement on Principles Underlying the Guidelines on Conditionality, and subsequent revisions to operational guidance on conditionality. The analysis is based on the five key interrelated principles guiding the design of conditionality: national ownership of programs, parsimony in program-related conditions, tailoring to country circumstances, effective coordination with other multilateral institutions, and clarity in the specification of conditions. In particular, the principle of parsimony requires that program-related conditions be critical (or the minimum necessary) to achieve program objectives and goals, critical for monitoring program implementation, or necessary for implementing specific provisions under the Articles of Agreement (the "criticality criterion"). Beyond assessing compliance with these guidelines and principles, the paper also examines the implementation of conditionality.
June 18, 2012
2011 Review of Conditionality - Outcomes of Fund-Supported Programs
Description: This paper examines the effects of Fund-supported programs initiated during 2002-11, with special emphasis on programs started after the onset of the recent global economic crisis. The paper investigates the effects of Fund-supported programs on key macroeconomic variables and, data restrictions permitting, on social variables (social government spending, unemployment and social outcome indicators). Further, it analyzes the contribution of fiscal and external accommodation in helping program countries get through the recent global crisis. The assessment of the impact of Fund-supported programs is necessarily incomplete to the extent that the global financial crisis is ongoing and the most recent crisis programs such as the March 2012 program for Greece are not included. The Crisis Program Review provides detailed analysis of recent GRA-supported programs.
June 15, 2012
Fiscal Policy and Employment in Advanced and Emerging Economies
Description: This paper discusses tax and expenditure policy reforms to raise employment. Using data for 58 advanced and emerging economies, the paper provides a unified assessment of tax and expenditure measures that have usually been addressed separately. The focus is on incentives to increase labor demand and supply rather than on the impact of fiscal policy on employment through aggregate demand effects. It also discusses policies to improve the matching of labor supply and demand, and the principles which should guide the design of country-specific fiscal reforms to boost employment. A comprehensive set of tables on fiscal policies and labor market outturns for advanced and emerging economies is provided, permitting cross-country comparisons to facilitate the design of reform strategies.
June 12, 2012
Proposed Amendment on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas—Status of Acceptances and Consents
Description: This paper reviews progress toward implementation of the 2010 Governance and Quota Reforms. It updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment” or “Seventh Amendment”) as set out in the Board of Governors Resolu0tion No. 66-2.
June 5, 2012
A Survey of Experiences with Emerging Market Sovereign Debt Restructurings
Description: This paper takes stock of past episodes of debt restructuring and reviews the relevant literature. Based on cross-country experience from the late 1990s through 2010 of emerging markets it offers some stylized facts.
May 31, 2012
Precautionary and Liquidity Line—Operational Guidance Note
Description: The Precautionary and Liquidity Line (PLL) was introduced in the context of the Board discussion on the Fund's Financing Role: Reform Proposals on Liquidity and Emergency Assistance in November 2011, replacing and broadening the scope of the previously established Precautionary Credit Line (PCL). The following note provides operational guidance to staff and further background information on the PLL. SPR (the Emerging Markets Division), FIN, and LEG stand ready to clarify any further questions that departments may have on the PLL.
May 31, 2012
Flexible Credit Line—Operational Guidance Note
Description: The Flexible Credit Line (FCL) was introduced as part of a package of reforms to the Fund’s lending facilities in March 2009 and its design was further refined in August 2010. The following provides operational guidance and further background information on the FCL. SPR (the Emerging Markets Division), FIN, and LEG stand ready to clarify any further questions departments may have on the FCL or other aspects of the reforms to lending and conditionality.