Assessing the IMF Conditionality Programs: Implications for Governance of International Finance

Abstract

This paper focuses on the IMF in order to assess the degree to which international financial institutions can meet increasing expectations to stabilize the international financial system. To do so, this paper reviews prior studies of the IMF to examine how political factors affect the IMF’s decision making and policy implementation of IMF programs. The IMF is not free from political interference. This paper also analyzes the IMF from two theoretical perspectives: the IMF as a bureaucratic organization and principal-agent relationships and the IMF. While the IMF makes various reform efforts, balancing the trade-offs between effectiveness and representation remains a difficult task given the sequential principal-agent relationships.