Outcomes-Based Conditionality: Its Role and Optimal Design

May 1, 2006

Preview Citation

Format: Chicago

Anna Ivanova. Outcomes-Based Conditionality: Its Role and Optimal Design, (USA: International Monetary Fund, 2006) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper employs a principal-agent framework to analyze the role and design of outcomesbased conditionality in the presence of market frictions and domestic opposition. The results suggest that outcomes-based conditionality is a good option for the IMF when opposition to reforms is relatively weak and when the IMF loan is unsubsidized. The only role conditionality ends up playing in this case is that of an efficiency tool. The benefits of outcomes-based conditionality in the presence of strong opposition are less clear, and using this conditionality as an incentive tool would require that IMF financing be subsidized.

Subject: Loans, Market interest rates, Tax incentives

Keywords: IMF loan, WP

Publication Details

Pages:

25
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 2006/128
Stock No:

WPIEA2006128
ISBN:

9781451863888
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers