Front Matter Page

2011 Review of Conditionality

Background Paper 1: Content and Application of Conditionality

Prepared by the Strategy, Policy, and Review Department In consultation with other Departments Approved by Siddharth Tiwari June 18, 2012

Contents

• Glossary

• I. Introduction

• II. Streamlining and the Principle of Parsimony

  • A. Program Goals, Instruments, and Conditionality: Focus and Alignment

  • B. Focus of Structural Conditionality

  • C. Focus of Quantitative Conditionality

  • D. Volume of Conditionality

  • E. Depth of Structural Conditionality

• III. Other Key Principles of Conditionality

  • A. Ownership

  • B. Tailoring

  • C. Coordination

  • D. Clarity

• IV. Implementation of Conditionality

  • A. Program Interruptions

  • B. Implementation of Conditionality

• Tables

• 1. Determinants of the Probability of a High Number of Structural Conditions

• 2. Presentation of Conditionality

• 3. Non-Core Conditionality in Case Studies

• 4. Track Record and Implementation

• 5. Flexibility in the Timeline and Implementation Record

• 6. Determinants of Implementation by Review, 2006-2011

• Figures

• 1. Program Goals and Instruments, 2006-2011

• 2. Program Objectives and Conditionality

• 3. Breakdown of Structural Conditions Into IMF Competencies

• 4. Focus of Structural Conditionality

• 5. Fiscal and Financial Sector Conditionality in GRA-Supported Programs

• 6. Quantitative Conditionality in Fund-Supported Programs, 2002-2011

• 7. Quantitative and Social-Related Indicative Targets, 2006-2011

• 8. Number of Structural and Quantitative Conditions per Review, 2002-2011

• 9. Number of Indicative Targets Review, 2006-2011

• 10. Structural and Quantitative Conditionality in Fund-Supported Programs, 2002-2011

• 11. Distribution of Structural Conditions per Review, 2002-2011

• 12. Total Number of Conditions per Year of Ongoing Programs, 2002-2011

• 13. Number of New Conditions Set, 2008-2011

• 14. Ownership - Results of the Survey of IMF Staff and Country Authorities

• 15. Number of Structural Conditions and CPIA Rating, 2005-2009

• 16. Structural Conditionality and Access in GRA and PRGT Programs, 2002-2011

• 17. Focus of Conditionality and Access, 2008-2011

• 18. Tailoring and Flexibility of Fund Programs - Survey Results

• 19. Fund Coordination with Aid Partners - Survey Results

• 20. Policy Options - Survey Results

• 21. Program Interruptions By Year of Review, 2002-2011

• 22. Average Duration of Off-Track Periods

• 23. Implementation of Program Conditionality

• Boxes

• 1. Program Instruments and Structural Conditionality

• 2. Structural Conditionality Alignment and Tailoring

• 3. Conditionality in the Area of Public Financial Management

• 4. Macro-Social Structural Conditionality in Fund-Supported Programs

• 5. Wage Bill Ceilings in PRGT Programs

• 6. Counting Conditions

• 7. Leveraging Surveillance for Conditionality

• 8. Number of Conditions and Depth

• 9. Ownership, Program Implementation, and the Use of PAs

• 10. Ownership in Recent Programs: Lessons from Iceland, Latvia, and Belarus

• 11. Design of Conditionality in Co-financed Euro Area Programs

• Appendices

• 1. Institutional Classification of Structural Conditionality

• 2. Determinants of Structural Conditionality

• 3. Leveraging Surveillance for Conditionality

• 4. Discontinuation of SPCs and Ownership

• 5. Guidance on the Principle of Clarity

Glossary