Abstract

1. This chapter describes how the IMF’s policies with respect to prolonged use have evolved over time. It shows that these policies have moved gradually toward greater acceptance of the need to finance adjustment over a longer time period, especially in low-income countries, and that this has increased the probability of prolonged use. However, the implications of some of these changes both for the extent of prolonged use and possible adverse consequences may not have been fully and explicitly recognized. It also describes how some elements of a strategy for dealing with prolonged use were adopted by the IMF’s Executive Board at various times; however, the country case studies and other evidence suggest that these strategies were not fully implemented.1