Alexander E. Kentikelenis 
University of Oxford  
 
Thomas H. Stubbs
 
University of Cambridge 
 
Lawrence P. King  
University of Cambridge 
 
 
IMF conditionality and development policy space, 1985–2014 
 
Abstract 
In recent years, the International Monetary Fund (IMF) has re-emerged as a central actor in 
global economic governance. Its rhetoric and policies suggest that the organization has 
radically changed the ways in which it offers financial assistance to countries in economic 
trouble. We revisit two long-standing controversies: Has the policy content of IMF 
programmes evolved to allow for more policy space? Do these programmes now allow for the 
protection of labour and social policies? We collected relevant archival material on the IMF’s 
lending operations and identified all policy conditionality in IMF loan agreements between 
1985 and 2014, extracting 55,465 individual conditions across 131 countries in total. We find 
little evidence of a fundamental transformation of IMF conditionality. The organization’s post-
2008 programmes re-incorporated many of the mandated reforms that the organization claims 
to no longer advocate and the number of conditions has been increasing. We also find that 
policies introduced to ameliorate the social consequences of IMF macroeconomic advice have 
been inadequately incorporated into programme design. Drawing on this evidence, we argue 
that multiple layers of rhetoric and ceremonial reforms have been designed to obscure the 
actual practice of adjustment programmes, revealing an escalating commitment to hypocrisy.  
Acknowledgments 
We thank Peter Bakvis, Nathan Coplin, Jo Marie Griesgraber, David Lane, Matthew Martin, 
Sargon Nissan, Isabel Ortiz and three anonymous reviewers for helpful comments, and Joshua 
Watts for excellent research assistance; the usual disclaimers apply.  
Funding 
The authors gratefully acknowledge funding by the Institute for New Economic Thinking 
(INET Grant INO13-00020: ‘The Political Economy of Structural Adjustment’), the 
Cambridge Political Economy Society Trust, and the Centre for Business Research at the 
University of Cambridge. 
 
‘Structural adjustments? That was before my time. I have no idea what 
it is. We don’t do that any more. No, seriously, you have to realise that 
we have changed the way in which we offer our financial support.’ 
— Christine Lagarde, IMF Managing Director (IMF 2014g). 
 
‘Having known the history of [IMF] programmes, […in Iceland] the 
IMF was really rather flexible. I can’t really make sense of this new, 
cuddly IMF; it can’t possibly last.’ 
— Martin Wolf, Financial Times chief economics 
commentator (Wolf 2011). 
 
 
Introduction 
The International Monetary Fund (IMF) has had a tumultuous past decade. In the mid-2000s, 
demand for its services was at historic lows, resulting in staff layoffs and widespread doubts 
about its future (Momani and Helleiner 2007). Noting this demise, anthropologist and activist 
David Graeber (2008:16) pronounced that ‘the IMF is rapidly approaching bankruptcy, and it 
is a direct result of the worldwide mobilization against them. To put the matter bluntly: we 
destroyed it.’ Critics in academia and civil society, as well as anti-IMF protestors around the 
world, could feel vindicated. Yet, such celebrations proved premature. In the face of the on-
going global financial crisis, G-20 leaders committed $750billion in 2009 to enable the IMF to 
step up its operations (IMF 2009a:10). Reflecting the significance of this cash injection, its 
Managing Director at the time, Dominique Strauss-Kahn, could safely proclaim that ‘the IMF 
is back’ (BBC 2009). Between 2009 and 2014, the organization made 129 new loans to 76 
countries, reinforcing its standing as the central actor in global economic governance and crisis 
management.  
Yet, the IMF’s recent revival has been accompanied by an unfamiliar discourse. As the 
opening quote by current Managing Director Christine Lagarde suggests, ‘we don’t do that any 
more’ has become a mantra of the organization. This tone is far removed from what observers 
have long come to expect from the IMF, and is a clear departure from the reputation that 
normally precedes it, namely prescriptions of fiscal austerity, trade and capital account 
liberalization, public sector layoffs, and ‘structural reforms’ (Babb and Buira 2005; Chang 
2006; Stiglitz 2002). Instead, the organization now acknowledges the importance of counter-
cyclical spending to sustain economic activity (Berg et al. 2009; IMF 2009c), the potential 
utility of capital controls (IMF 2010b; 2011a; Ostry et al. 2010), the possible perils of high 
income inequality (IMF 2014c), and the adverse consequences of inadequate social protection 
policies (IMF 2014f; 2014b; 2015b).
1
 
Taken at face value, such policy advice would indeed amount to a monumental shift in the 
organization’s practices. Some scholars have identified the potential onset of an organizational 
recalibration in these developments (Ban 2015; Ban and Gallagher 2015; Broome 2014; Grabel 
2011). Even so, there remains reason for scepticism as some studies suggest that the practice of 
IMF programmes in recent years largely reflects business-as-usual (Gabor 2010; Grabel 2011; 
Griffiths and Todoulos 2014; Güven 2012; Muchhala 2011; Van Waeyenberge, Bargawi, and 
McKinley 2010; Weisbrot et al. 2009). For example, Weisbrot and colleagues (2009) revealed 
that 31 of the 41 recent IMF loans they examined contained pro-cyclical macroeconomic 
policies. Similarly, Griffiths and Todoulos (2014:4) pointed to ‘widespread and increasing use 
of controversial conditions in politically sensitive economic policy areas.’ The IMF has 
challenged the accuracy and veracity of such conclusions (e.g. Reuters 2014; Roaf 2009). Until 
now, however, short timeframes and small samples have limited our ability to evaluate these 
competing claims.  
This paper examines the evolution of IMF-mandated policy reforms—so-called 
conditionality—and assesses whether the recent rhetoric of the organization has translated into 
actual policy practice. We focus on two long-standing controversies: Has the policy content of 
IMF programmes changed to allow for more policy space? Do these programmes now factor in 
considerations over their consequences on labour and social protection policies? To explore 
these issues, we collected relevant archival material on the IMF’s lending operations and 
identified all policy conditionality in IMF loan agreements between 1985 and 2014. In total, 
we retrieved over 4,500 loan-related documents, from which we extracted 55,465 individual 
conditions applicable across 131 countries. We focus exclusively on the content of IMF-
mandated reforms, setting aside the questions surrounding the extent to which IMF 
conditionalities are owned by—rather than imposed upon—borrowing countries.      
We find little support for the ‘fundamental transformation’ thesis. Although in the immediate 
aftermath of the global financial crisis the scope of reforms covered in IMF lending 
programmes was somewhat reduced, what appeared at the time as a period ‘pregnant with new 
development possibilities’ (Grabel 2011:805) never came to fruition. Instead, as the IMF 
solidified its role as the central institution charged with crisis management and built up 
organizational self-confidence anew, its programmes re-incorporated many of the reforms that 
it claimed to no longer advocate. The most recent data from 2014 show a sharp increase both in 
the total number of conditions and in the array of policy areas under reform.  
                                                 
1
 In addition, the organization’s Research Department has also published new research as ‘Staff 
Discussion Notes’ (Dabla-Norris et al. 2013; 2015; Ostry, Berg, and Tsangarides 2014) that often go 
beyond official IMF line, as expressed in press releases, policy statements, or factsheets. The extent to 
which these findings are taken up in programme design is unclear, but recently, the IMF’s own 
Independent Evaluation Office (IEO 2011 p. vii) reported ‘a widespread view among IMF staff’ that 
research findings were misaligned with the organization’s policies. These issues are not further 
explored here. 
What explains the apparent distance between the IMF’s rhetoric—broadcasted in the 
organization’s Review of Conditionality (IMF 2012b), factsheets, press releases and responses 
to critics—and the actual practice of the policy reforms that the organization designs? We 
interpret our findings as evidence of the twin processes of ‘paradigm maintenance’ and 
‘organized hypocrisy’ in international bureaucracies (Güven 2012; Lipson 2007; Wade 1996; 
Weaver 2008).  
Extending this work, we argue that the production and maintenance of hypocrisy is a dynamic 
process that necessitates an intensification of efforts in order to maintain myths about 
organizational practices. We identify this process as escalating commitment to hypocrisy. For 
the case of the IMF, we show that as the organization invested in the maintenance of a myth 
about its actual practices, it also became more adept and inventive at obscuring reality. This 
occurred through the rebranding of existing practices and the addition of token gestures to 
placate critics, without altering the underlying premises of reform design. In short, we show 
how the maintenance of business-as-usual practices became tenable only by adding ever-more 
layers of ceremonial reforms and rhetoric. 
The analysis proceeds as follows. First, we elaborate on and extend analytical approaches to 
the study of hypocrisy by international public bureaucracies. Second, we briefly discuss the 
origins of and debates around IMF conditionality. Third, using our original data, we present 
general trends in the application of conditionality over the past three decades. Subsequently, 
we weigh the evidence on recent IMF rhetoric versus practice in two policy areas: social 
protection and labour issues. We conclude by reconsidering how much policy space is 
available to developing countries under IMF programmes, and by discussing the implications 
of our findings for academic and policy debates. 
 
Escalating commitment to hypocrisy 
Contemporary organizations are best understood as ‘open systems’ influenced both by external 
environments and internal pressures and demands (Pfeffer and Salancik 1978; Scott 1995). As 
a result, a ‘decoupling’ can emerge between stated goals and actual practices of organizations 
(Meyer and Rowan 1977). Since evidence of this decoupling can threaten legitimacy and 
resources on which organizations are dependent (Powell and DiMaggio 1991), they attempt to 
mask this apparent disjuncture by engaging in ‘organized hypocrisy’ (Brunsson 1989; 1993), 
which is necessary for organizational survival: ‘Without hypocrisy, one party or interest would 
be completely satisfied and all others completely dissatisfied. With hypocrisy, several parties 
and interests can be somewhat satisfied’ (Brunsson 2003:206). In other words, to maintain 
their standing and relevance, organizations need to respond to pressures, but they may do so in 
a ceremonial—rather than substantive—manner (Meyer and Rowan 1977; Scott 1995). 
These insights from organizational sociology have been introduced to the study of international 
public bureaucracies, which face a range of pressures from their principals (states), 
organizational environments, internal bureaucratic or technocratic agendas, and—
occasionally—the public. Catering to contradictory demands would obfuscate bureaucratic 
action, therefore a degree of hypocrisy has come to be anticipated by students of these 
organizations (Bukovansky 2010; Lipson 2007; Mundy and Menashy 2014; Weaver 2008). 
These accounts have distinguished between different gradients of hypocrisy: from blatant 
violations of established policies, to greyer areas where rhetoric is inadequately, superficially 
or haphazardly translated into practice. Yet, despite the widespread practice of organized 
hypocrisy, intergovernmental organizations are highly sensitive to such accusations, insofar as 
these can erode their legitimacy (Seabrooke 2010). Two responses can be deployed to defend 
against such challenges. One path involves accepting criticism in a way that necessitates 
corrective action.
2
 Alternatively, organizations can opt to respond to accusations of hypocrisy 
by adding another layer of hypocrisy.  
In this article, we examine the latter process, whereby maintaining myths about actual practices 
over extended periods of time necessitates intensification of efforts. We identify this layering 
process as escalating commitment to hypocrisy: rhetorical commitments are overlaid with a 
rebranding of activities, issuing factsheets showcasing a biased and/or inaccurate assessment, 
or instituting new policies that are never adequately incorporated into organizational practice. 
This path of action entails considerable ‘sunk costs’ and explains behaviour-persistence (Simon 
1997), since backtracking after years (or decades) of ceremonial commitment to a goal can 
result in significant reputational damage and legitimation crises. 
To support this argument, we revisit debates surrounding the practice of IMF conditionality. In 
particular, we examine the relationship between conditionality and development policy space. 
We understand policy space as a government’s ability to select the policy instruments via 
which they address their economic problems, free from coercive conditionalities. Insofar as 
IMF adjustment programmes are indicators of underlying economic trouble, policy space is 
already expected to be somewhat limited. But even under constraining economic conditions, 
policy options remain. According to our understanding, then, governments with IMF 
programmes have greater policy space when they can choose exactly how to mend large 
external or budgetary imbalances; but less policy space when conditionalities specify the 
policy instruments by which they must address these imbalances (for instance, via increasing 
value added tax or privatising natural resources).
3
  
                                                 
2
 A recent World Health Organization (WHO) mishap is revealing of the reluctance of international 
organizations to follow this route. Responding criticisms over its role in the Ebola crisis, the 
organization issued an uncharacteristically strongly-worded statement: ‘we did not work effectively in 
coordination with other partners, there were shortcomings in risk communications and there was 
confusion of roles and responsibilities’ (The Guardian 2015). The initial reaction by observers was that 
‘by using strong and clear language the WHO’s Leadership had decided to take a new approach to 
dealing with the criticisms’ (Grepin 2015). This was not to last. Within hours, the WHO edited the 
passage into more circumspect language: ‘We have learned the challenges of coordination. We have 
learnt to recognise the strengths of others, and the need to work in partnership when we do not have the 
capacity ourselves’ (WHO 2015). 
3
 Our understanding of development policy space applies to countries at all income levels that are under 
distress and IMF supervision, and is similar to that of other scholars in this field (Chang 2006; Cooper 
1968; DiCaprio and Gallagher 2006; Gallagher 2010; Grabel 2011; Kumar and Gallagher 2007; Mayer 
2008; Shadlen 2005; Wade 2003). Like these accounts, we acknowledge that open economies do not 
have absolute policy autonomy, as they need to respond to changes in the global economic 
 
 Recurring controversies on IMF conditionality  
The IMF was founded at the Bretton Woods conference of 1944, and has since become the key 
intergovernmental organization underpinning the global financial system. Among its various 
activities (including data collection, research, and training policy elites), IMF lending 
programmes to countries in economic trouble have attracted most attention. In exchange for 
financial support, borrowing countries agree to implement a package of obligatory policy 
reforms (conditionality), phased over one or more years. In turn, the implementation of 
conditionality is assessed on a quarterly or bi-annual basis and determines the disbursement of 
IMF funds (in tranches). The content of conditionality has been among the most controversial 
outputs of any intergovernmental organization (Williamson 1983). Reviewing the full range of 
debates around these issues is beyond the scope of this article and available elsewhere (Babb 
and Carruthers 2008; Dreher 2009; Guitián 1995; Kapur 2005; Nelson 2014a; 2014b; Nowzad 
1981; Spraos 1986; Vreeland 2003; Williamson 1983). Here, we revisit two persistent 
controversies: mission creep in the IMF’s policy advice, and the social consequences of 
conditionality.  
(a) Mission creep 
The IMF’s purpose, as stated in its Articles of Agreement, is to provide member-states ‘with 
opportunity to correct maladjustments in their balance of payments without resorting to 
measures destructive of national or international prosperity.’4 Excluding a short period after its 
establishment, the IMF has practiced conditional lending in pursuit of this objective. For the 
first four decades of its operations, conditionality included a set of predictable reforms that 
focused almost exclusively on budget deficit reductions, restrictive monetary policy, and 
exchange rate devaluations (Dell 1981; 1982; Diaz-Alejandro 1981; Williamson 1983); that is, 
areas understood to be covered by the IMF’s mandate. At the same time, the IMF was 
mandated to remain neutral vis-à-vis its borrowers’ economic and social objectives—an 
approach known as the ‘doctrine of economic neutrality’ (Finch 1983). For example, according 
to this approach, while the IMF provided support for a country’s macroeconomic adjustment 
efforts, ‘how the government brought down the deficit, by raising taxes or cutting expenditure, 
and the particular taxes or expenditure at issue [remained] the government’s responsibility’ 
(Polak 1991:39). In other words, IMF programmes did not make explicit attempts—at least via 
conditionality—to change the underlying structure of borrowing countries’ economies.  
However,  in the 1980s, responding to political pressures and new economic ideas, the IMF’s 
programmes expanded their policy content to include a range of ‘structural’ conditionalities, 
                                                                                                                                                          
environment. Consequently, the question is not whether or not these countries have to adapt, but the 
terms and conditions under which they do so. 
4
 While the IMF’s lending practices attract most attention and controversy, the organization also has 
other important functions—for instance, collecting and publishing data, conducting ‘surveillance’ of its 
members’ economic policies or providing technical assistance. These aspects of IMF activities are not 
discussed here. 
moving well beyond what the IMF’s founders had prescribed in the Articles of Agreement 
(Babb and Buira 2005).  The era of so-called structural adjustment saw the involvement of the 
IMF in sensitive policy areas, such as the privatization of state-owned enterprises, trade and 
financial liberalization, and economic deregulation (Summers and Pritchett 1993; Toye 1994; 
Williamson 1990). Over subsequent years, the remit of conditionality expanded further to 
cover a growing array of policy areas, including social policy, labour market reforms, and 
‘good governance’ (Babb 2013; Chang 2006; Rodrik 2002; Serra and Stiglitz 2008; Stiglitz 
2002; Stubbs, Kentikelenis, and King 2016). Scholars understood the widening number of 
policy areas that IMF-prescribed policies covered—known as scope of conditionality—as 
‘mission creep’ (Babb and Buira 2005). These arguments suggest that the IMF’s conditionality 
moved beyond its core mandate of economic issues and ‘into areas that properly belong in the 
realm of politics’ (Stiglitz 2002:44-45), thereby challenging national sovereignty and domestic 
autonomy to design policy (Babb and Carruthers 2008; Krasner 1999; Przeworski and 
Vreeland 2000). In particular, after the organization’s handling of the Asian financial crisis of 
the late 1990s, a growing chorus of academics and policymakers strongly criticised the 
organization for advocating reforms in many and disparate policy areas, frequently with little 
direct relevance to the IMF’s core areas of expertise (Feldstein 1998; Goldstein 2001; Meltzer 
2000; Radelet and Sachs 1998; Stiglitz 2002).  
Following this torrent of high-profile criticisms, the IMF itself acknowledged the sprawling of 
conditionality in an excessive number of policy areas and embarked on a long process of 
‘streamlining’ (IMF 2001). New lending programmes would, in the IMF’s words, afford 
‘policy space’ to governments as long as they reached ‘the standard that members’ policies 
must meet in order to qualify for Fund support’ (IMF 2004). The IMF intended new principles 
underpinning the design of conditionality to mark a break from the past: ‘ownership’ of 
reforms, ‘tailoring’ to country specificities, ‘parsimony’ and ‘clarity’ in conditionality, and 
‘coordination’ with other international organizations (IMF 2004). Yet, beyond rhetoric, the 
IMF’s Independent Evaluation Office raised doubts about the extent of genuine change in 
lending operations, as conditionality remained ‘very detailed, not obviously critical, and often 
felt to be intrusive’ (IEO 2007b p. vii).5 Responding to the new round of criticisms, the IMF 
produced a series of self-congratulatory reports highlighting the apparent overhaul of past 
practices: ‘programs are helping countries to weather the worst of the [global financial] crisis, 
[… and] program design [has] learned the lessons of the past’ (IMF 2009h:43-44; 2009c). 
Indeed, ‘flexibility’ was the term touted in IMF reports to describe its policy advice in the early 
crisis period (IMF 2009e; 2009f; 2009b; 2009c; 2009h). Continuing on the same theme, in 
2012, the organization’s review of conditionality—the clearest articulation of the IMF staff’s 
house view—concluded that ‘program conditionality has generally been appropriately 
streamlined, even-handed, and tailored to country needs’ (IMF 2012a; 2012b:4). In short, the 
                                                 
5
 The Independent Evaluation Office (IEO) was established in 2000, in part to counter persistent 
criticisms of the IMF’s lack of transparency and accountability and to aid the organization’s Executive 
Board in its oversight functions (Lissakers, Husain, and Woods 2006). The objective of this 
organization is to provide impartial assessments of IMF operations, and its reports scrutinize standard 
IMF practices and controversial cases. Given the high visibility and reputation of these reports, IMF 
staff commonly respond to issues raised in these reports. 
current IMF rhetoric conceives of its recent programmes as parsimonious and flexible, thereby 
definitively addressing past criticisms over its own mission creep and its undue restrictions on 
borrowing countries’ policy space. 
(b) Social consequences 
Controversies surrounding the social consequences of IMF conditionality have a long history 
(e.g. Payer 1974). Critics argue that—by design or by omission—IMF conditionality can result 
in extensive ‘collateral damage’ in developing countries (Babb 2005). Furthermore, they argue 
that the social development policy agenda was never institutionalised within the organization 
(Vetterlein 2010). Reflecting these concerns, policy reforms designed by the IMF have recently 
been linked to increases in poverty and inequality (Garuda 2000; Oberdabernig 2013) and 
adverse health outcomes (Kentikelenis et al. 2011; Kentikelenis, Karanikolos, et al. 2014b; 
Rowden 2009; Stuckler and Basu 2009).  
A strand of criticism prevalent in the early phases of IMF-designed adjustment programmes 
focused on the apparent blindness of the organization to issues beyond what was, at the time, a 
narrow macroeconomic agenda. A landmark study by UNICEF found that adjustment 
policies—such as rapid and/or excessive public expenditure reductions—could be linked to 
adverse effects on welfare and human development (Cornia, Jolly, and Stewart 1987). 
Similarly, referring to concerns over the social consequences of economic adjustment, the 1990 
Human Development Report concluded that ‘it is short-sighted to balance budgets by 
unbalancing the lives of the people’ (UNDP 1990:34). Responding to such concerns, Jacques 
De Larosière, IMF Managing Director in the 1980s, acknowledged that ‘adjustment that pays 
attention to the health, nutritional and educational requirements of the most vulnerable groups 
is going to protect the human condition better than adjustment that ignores them’ (de Larosière 
1986).  
Despite this recognition by the IMF, criticisms of its policy advice only intensified. Trailing 
the expansion of the IMF’s remit into an ever-growing number of policy areas, a new 
generation of studies furnished additional evidence of the links between IMF-designed 
reforms—like privatization, trade and financial liberalization, and the marketization of social 
policies—and adverse social consequences. Of the relevant debates (see Colclough and Manor 
1991; Stewart 1991; Toye 1994; van der Hoeven and Stewart 1993), we revisit two issues that 
have attracted considerable attention.  
First, the adverse effects of IMF conditionality on a range of labour-related indicators, 
including employment levels, wages and employment protection policies, have been well-
documented (Abouharb and Cingranelli 2007; R. G. Blanton, S. L. Blanton, and Peksen 2015; 
Garuda 2000; ITUC 2012; 2013; Lloyd and Weissman 2002; Marphatia et al. 2007; Rickard 
and Caraway 2014). For instance, Rickard and Caraway (2014) found that IMF borrowers 
reduce their spending on wages only when conditionality includes public sector reforms. 
Second, IMF conditionalities have been linked to a weakening of social protection policies, 
particularly on health (Kentikelenis, King, et al. 2014a; Rowden 2008; 2009; Stuckler et al. 
2010). Recently, Stuckler and Basu (2009) examined whether IMF programmes affected the 
health systems of low-income countries, and found evidence linking the organization’s policy 
advice to insufficient public health resources, unsuccessful health sector reforms, and impeded 
efforts in the combat against infectious disease and child and maternal mortality. Government 
wage bill ceilings have also been identified as a key impediment to hiring or retaining much-
needed health sector workers (Goldsborough 2007; Lefrançois 2010; Marphatia 2009; McColl 
2008; McCoy et al. 2000; Rowden 2008). 
The IMF has responded to these criticisms by claiming that its modus operandi now 
incorporates due attention to social protection issues. In relation to government wage bills, for 
instance, the IMF reports that they no longer rely on such policies (Fedelino, Schwartz, and 
Verhoeven 2006; Gupta 2015; Martijn and Tareq 2007; McDonald 2007; Verhoeven and 
Segura 2007). The organization has also repeatedly argued that recent lending programmes 
include conditions ‘designed to enhance social protection’ (Reuters 2014), particularly in the 
form of ‘social spending floors’ (IMF 2008; 2015b). These conditions stipulate a minimum of 
social spending—primarily on health and education—and have been a cornerstone in the 
IMF’s purported attention to the social consequences of its policy advice (Clegg 2014). Indeed, 
a recent study by IMF staff found that Fund programmes are associated with increases in social 
spending in low-income countries (Clements, Gupta, and Nozaki 2013). A series of internally-
generated studies also report flattering results on the organization’s impact on social protection 
policies (Clements, Gupta, and Nozaki 2014; Gupta 2010; 2015).  
Is the organization correct to proclaim that it has addressed criticisms and adapted the policies 
attached to its financial assistance packages? Or are critics accurate in their portrayal of the 
IMF as ‘going backwards’ (Griffiths and Todoulos 2014) by impinging on countries’ politics 
and adversely affecting sensitive policy areas? The remainder of this paper examines the 
evolution of IMF conditionality, and presents evidence that directly addresses these two 
controversies. 
 
Development policy space under IMF programmes 
To investigate the evolution of conditionality, we draw on IMF archival documents covering 
the years 1985-2014. In total, we searched 4,590 loan-related documents
6
 to extract 55,465 
conditions spread across 131 countries. These documents consisted of IMF staff reports, 
national governments’ Letters of Intent, and accompanying Memoranda of Economic and 
Financial Policies, which specify conditionality. Documents are generally updated with 
additional conditions on three- or six-month review cycles (although delays are common), and 
the successful conclusion of reviews determines the disbursement of loan tranches. In this 
                                                 
6
 These documents also include those that relate to the post-2010 loans to Eurozone countries, designed 
jointly by the IMF, the European Commission, and the European Central Bank. The division of labour 
within the Troika—and, therefore, accountability for the outputs—was not clearly demarcated. 
However, while it is clear that both the IMF and the European Commission had a role in the design of 
structural conditionalities (IMF 2013a)some observers have pointed out the IMF’s junior role in the 
Troika (Pisani-Ferry, Sapir, and Wolff 2013). Future analyses can explore in greater detail where the 
organization had most influence in the design of the Eurozone adjustment programmes. The Eurozone 
conditionalities referred to here were all identified in IMF documents (rather than European 
Commission reports). 
section, we focus on the number of conditions applicable per country–year; we discuss 
methodological issues related to data collection in Appendix I.  
Before presenting our findings, a word of caution is warranted. Reporting the number of 
conditions, while revealing, is an imperfect measure of conditionality. For example, a 
condition stipulating the privatization of a state-owned enterprise is qualitatively distinct from 
one introducing a value-added tax. Despite this, previous studies have shown the measure is a 
suitable proxy for the intrusiveness of conditionality (Caraway, Rickard, and Anner 2012; 
Copelovitch 2010; Dreher and Jensen 2007; Dreher, Sturm, and Vreeland 2009; 2015), and it 
has been fruitfully employed in the IMF’s own studies (Bulir and Moon 2004; Ivanova et al. 
2001). We proceed with this indicator to yield inferences about important aspects of the IMF’s 
policy advice: the evolution of conditionality, changes to the use of so-called structural 
conditions, and patterns in the breadth of policy areas targeted by IMF conditionality. In the 
subsequent section, we focus on country-specific experiences to revisit controversies 
surrounding labour issues and social protection.  
(a) The evolution of conditionality 
In Figure 1, we present countries’ total number of conditions applicable in all IMF loans 
between 1985 and 2014. During this period, Romania, Pakistan, Tanzania, Kyrgyzstan and 
several West African countries emerge as those with highest overall conditionality burdens: all 
had repeat loans that carried a high degree of conditionality. Furthermore, we observe widely 
diverging experiences with IMF conditionality across countries. For example, Mauritania had 
IMF programmes for 25 of the 30 years covered, carrying a total of 1,058 conditions. Other 
countries had only brief encounters with the Fund, which is also reflected in relatively limited 
conditionality. For instance, China only had a one-year Stand-by Arrangement—the IMF’s 
staple lending facility—with 28 conditions attached between 1986-87.  
[Figure 1 here] 
Table 1 offers some indication of how conditionality has evolved in the period covered by our 
data. The number of conditions in IMF programmes active per calendar year rose in the late 
1980s, reaching a median of circa 42 conditions applicable per year over 1996-2007. 
Subsequently, we observe a reduction in the median of conditions to 33-35 in the immediate 
post-crisis period. Despite this apparent decline, we note an increase in high conditionality 
programmes. Afghanistan, Bangladesh, Bosnia, Cote d'Ivoire, Ghana, Greece, Haiti, Jamaica 
and the Ukraine have all carried 60 or more conditions at least once since 2009. In 2014, the 
median of conditions jumped to 44, the third highest such figure in our dataset after 2003 
(median of 45 conditions) and 2004 (median of 47 conditions). Moreover, several Eastern 
European and Central Asian countries represent high-lying outliers, peaking at over 140 
conditions for Russia in 1998 and Ukraine in 1999. Despite the fact that most post-communist 
countries started implementing IMF reform programmes in the early-1990s, only in the latter 
half of the decade did conditionality expand greatly in degree and scope.  
[Table 1 here] 
This evidence documents a slight reduction in IMF programme conditionality over the period 
following the onset of the global financial crisis, even though it remained considerably higher 
than the 1980s and early-1990s. The most recent data reveal a rising trend for the burden of 
conditionality since 2008. At the same time, while we notice this increase in conditionality, 
there has also been a marked decline in the number of lending programmes (new or in 
progress). A spike in post-crisis lending was followed by a decline in demand for IMF 
services. Of the 35 lending programmes active in 2014, 13 were to Sub-Saharan African 
countries and 10 were to European and Central Asian countries. Lending to Latin America or 
East Asia—common in the past—has declined considerably. Only 5 countries from these two 
regions had IMF programmes in 2014, compared 16 countries in 2000. 
(b) The rise, fall and return of structural conditionality 
The technical apparatus of conditionality has also evolved over time, with direct implications 
for the policy space available to borrowing countries. To determine the disbursement of loan 
tranches, IMF lending programmes make use of two types of conditions: quantitative and 
structural (Bird 2009; IMF 2015a). Originally, IMF conditions only appeared in the form of 
quantifiable macroeconomic targets (e.g., limits to government borrowing). While such 
conditions still form the bulk of conditionality up to the present, they only specify the policy 
ends rather than the means. That is to say, although quantitative conditions may be overly 
restrictive, in theory governments can pursue a range of alternative policies to meet them. In 
contrast, structural reforms clearly specify means that contribute to meeting the 
macroeconomic targets and other objectives. 
In this section, we examine evidence on structural conditionalities; that is, IMF-mandated 
reforms aimed at “reducing or dismantling government-imposed distortions or putting in place 
various institutional features of a modern market economy” (Goldstein 2003:366). Such 
reforms have commonly aimed at altering the underlying structure of an economy; for instance, 
by privatizing state-owned enterprises, legislating central bank independence, deregulating 
labour markets, or restructuring tax systems. These conditions can be distinguished vis-à-vis 
their strictness. Binding conditions—known as prior actions and structural performance 
criteria—form sine qua non criteria for continued financial assistance, and apply to areas that 
Fund staff consider ‘crucial to the success of the program’ (Leckow 2002). In cases of non-
implementation, countries must request a waiver by the IMF’s Executive Board, an action that 
could damage countries’ reputation in international markets (Andersen 2009). In contrast, non-
binding structural conditions—known as benchmarks—are also envisaged to apply only to 
policy areas ‘critical’ to the objectives of lending programmes, but rely on the discretionary 
assessment by staff (Goldstein 2001; Guitián 1995). 
As shown in Figure 2, structural conditionality has evolved over time. Starting from very low 
levels in the mid-1980s, within a decade the use of such policies expanded rapidly and peaked 
at about 16 structural conditions on average in 1998-99. That peak also marked the height of 
criticisms of the IMF’s policy advice, and eventually resulted in the launch of the ‘streamlining 
initiative’ (IMF 2001). Since then, the mean of structural conditions per year remained around 
12, followed by a sharp drop in 2008, partly explained by the phasing out of structural 
performance criteria (IMF 2009f). The latter was followed by an upsurge in structural 
benchmarks. Excluding the 2008 outlier, the trend for these benchmarks has been to increase 
recently (see also IEO (2014:29)). In 2014, more structural benchmarks were included in IMF 
programmes than in any other year. Another development has been the gradual reduction of 
prior actions (the strictest type of conditions) between 1999 and 2007. In 2011, however, we 
observe a reversal of the downward-sloping trend. Overall, the total number of structural 
conditions reached 12.1 in 2014, identical to the mean of the 2001-07 period. 
      [Figure 2 here] 
These trends suggest that structural adjustment is not a policy fad of the past with no relevance 
to contemporary IMF practices. The organization’s programmes still incorporate a considerable 
number of structural conditions, and the total number of such conditions still far exceeds that 
observed in the pre-1994 period. The emphatic return of structural conditionality in recent 
years calls into question the IMF’s ‘we don’t do that any more’ rhetoric.  
(c) Scope of conditionality 
While trends in the total number or type of conditions are suggestive, adequately assessing 
IMF policy prescriptions requires exploring in greater detail their distribution in different 
policy areas (Bird 2009). To do so, we build on a growing literature (Dreher et al. 2015; IEO 
2007a; 2007b; Stone 2008), and examine the ‘scope’ of IMF conditionality: how many policy 
areas are subject to reform in IMF programmes? Such metrics speak directly to issues of 
mission creep examined above, as critics argue that IMF conditionality has veered into an ever-
growing number of policy areas. Building on conventions in the literature (IEO 2007a), we 
identified the scope of reforms by classifying all conditions into mutually-exclusive policy 
areas, summarised in Table 2.  
      [Table 2 here] 
Figure 3 presents the share of IMF programmes with at least one condition per policy area in a 
given year. As IMF programs in all years include conditions in core areas of the organization’s 
competence (financial sector, monetary policy, fiscal policy, revenues and taxation, and debt 
issues), we have not included these shares in the figure.
7
 An initial observation is that the 
expansion of conditionality started in the mid-1980s, prompted by the push of the United 
States for programmes to include a structural, supply-side orientation and the associated 
introduction of the Structural Adjustment Facility (Babb 2009; Boughton 2001; Toye 1994). 
We examine the evolution of IMF-mandated reforms in different policy areas in turn, 
supplementing the quantitative data with additional country-specific evidence from recent IMF 
conditionality. Labour and social protection issues are examined separately and in greater 
depth in the subsequent section. 
      [Figure 3 here] 
                                                 
7
 Although IMF programmes have always devoted attention to these areas, the nature of the 
organization’s policy advice has evolved over time. For instance, the IMF’s tax policy advice has 
changed significantly over the decades: from an initial period of merely stipulating tax revenue targets 
to eventually designing tax policy, including the introduction of VAT and the reduction of trade-related 
taxes (Broome and Seabrooke 2007; Polak 1991; Seabrooke 2010). It is beyond the scope of this article 
to examine these issues. 
First, the IMF—an organization with a ‘globalizing mission’ (Woods 2006)—has become 
known for its advocacy of trade and financial liberalization. Indeed, this was reflected in IMF-
mandated reforms, with over 80% of programmes between 1990 and 2004 including conditions 
to that effect. Initially, conditions focused on the removal of tariffs and other import 
restrictions, but over time they expanded to cover issues of capital account liberalization. Yet, 
as is well-documented (Chwieroth 2013; Gallagher 2011; 2014; Gallagher and Ocampo 2013; 
Grabel 2011; 2014), the IMF changed its ‘house view’ on capital mobility, and—in the past 
decade—we could not find an instance of a condition advocating capital account 
liberalization.
8
 More generally, our evidence reveals a decline in external sector conditions 
(these now mostly refer to targets for holdings of international reserves). The changed views 
over capital mobility offer one plausible explanation for this drop. However, it is also the case 
that many economies have, by now, already opened up to international markets (often under 
IMF guidance), and have entered into numerous bilateral investment treaties envisaging capital 
mobility (Neumayer and Spess 2005), so the need—from the IMF’s standpoint—to impose 
related conditions has diminished.  
Second, a recurring controversy surrounding IMF programmes concerns their purported bias 
against state-owned enterprises (SOEs), considered as prone to mismanagement and 
inefficiencies (see Toye 1994). Reforms in this sector have been present in most IMF 
programmes since the late-1980s. Consistent with the timing of the post-communist transitions 
(and the IMF’s heavy involvement in the process), a height of 70-80% of programmes included 
at least one SOE-related condition in the mid- and late-1990s. In more recent years, about 50-
60% of programmes stipulate SOE reforms or privatizations. On the one hand, these declines 
could correspond to a narrowing of the scope of conditionality, as per IMF rhetoric (IMF 
2012a; 2013b). On the other hand, it may also be the case that after decades of countries 
corporatizing, privatizing or liquidating publicly-owned firms at the behest of the IMF (Brune, 
Garrett, and Kogut 2004), there is less room for further such reforms.  
Evidence from conditionality in recent IMF programmes lends credibility to the second 
explanation. The IMF’s repeat borrowers9 had a median of 2 SOE-related conditions per year 
under IMF programmes between 1985 and 2008, compared to a median of 0 such conditions 
per year under IMF programmes between 2009 and 2014. In contrast, new borrowers
10
 had a 
                                                 
8
 In relation to capital controls, while the IMF accepted their utility in the case of the Icelandic crisis 
(Grabel 2014), the country’s 2009 conditionality stipulated the “approval by cabinet of a strategy to 
phase out capital controls” (IMF 2009d). Yet, the IMF acknowledged that this should be done in a 
gradual manner. 
9
 To our knowledge, there is no established definition of a repeat borrower. Here, we use the term to 
refer to countries with 19 or more years under IMF programmes out of our 30-year coverage (1985-
2014), with at least one year since 2009. This definition yields a total of 23 countries: Armenia, Benin, 
Burkina Faso, Burundi, Cote d'Ivoire, Gabon, The Gambia, Georgia, Ghana, Guinea, Haiti, Kyrgyz 
Republic, Lesotho, Malawi, Mali, Mauritania, Mozambique, Niger, Pakistan, Romania, Senegal, Sierra 
Leone, and Tanzania. 
10
 New borrowers are defined here as countries with 8 or fewer years under IMF programmes out of our 
30-year coverage (1985-2014) and having an IMF programme at least one year since 2009. 
median of 1 condition per year under IMF programmes between 2009 and 2014. Recent key 
examples include the establishment of a privatization agency and preparation of a privatization 
plan for SOEs in Belarus (IMF 2010e), the privatization of the Kosovar state-owned 
telecommunications company (IMF 2010f), and a range of reforms to government enterprises 
in Antigua and Barbuda, the Solomon Islands, and St. Kitts and Nevis (IMF 2010a; 2011b; 
2012f). Beyond these cases, IMF conditionality in Eurozone countries has also mandated 
privatizations or SOE reforms. 
Finally, the IMF has long taken an interest in so-called institutional reforms aimed at 
promoting a ‘business-friendly’ environment, notwithstanding doubts over whether certain 
such arrangements are desirable or exportable (Rodrik 2002; Stiglitz 2002). Conditions in this 
broad policy area were common from the 1990s into the late-2000s, and covered reforms to 
legal systems, competition law, business regulation, environmental policies (including natural 
resources) and social protection issues. The early years of the crisis were marked by a drop in 
the inclusion of such reforms, showcased in the organization’s recent review of conditionality 
(IMF 2012a). Yet, this downwards trend reversed in 2010. By 2014, 63% of all programmes 
include one or more such institutional reforms.  
Similar to the experience with SOE-related conditionality outlined above, we observe 
differences in repeat versus new IMF borrowers. Repeat borrowers had an average of 1.0 
institutional reform conditions per year under IMF programme between 1985 and 2008,
11
 
compared to only 0.6 such conditions per year under IMF programme between 2009 and 2014. 
New borrowers had an average of 1.0 institutional reforms between 2009 and 2014 For 
instance, the 2014 Tunisian adjustment programme mandated passing a ‘decree for 
implementing the new investment code in line with the objective of protecting market access, 
reducing restrictions on investments, and rationalizing of incentives’ (IMF 2014h). Similar 
reforms were designed for Guinea, Cote d’Ivoire, Niger and elsewhere. Ukraine’s recent 
conditionality also stipulated that ‘the government will adopt an action plan to eliminate, 
streamline, simplify and clarify the legislative and regulatory frameworks governing economic 
activity’ (IMF 2014i). Likewise, the Armenian parliament was asked to adopt regulatory 
reforms in a range of policy areas, including entrepreneurship, customs, and social issues (IMF 
2014a).  
In sum, the evidence presented in this section reveals that only limited progress has been made 
in trimming down conditionality. While IMF programmes are not as all-encompassing as they 
were during the 1993–2007 period, still more than half stipulate reforms to state-owned 
enterprises and institutional environments. Further, the decline in the scope of conditionality is, 
in part, explained by the years a country has spent under IMF programmes. Repeat borrowers 
have already had to implement extensive conditionality over the years prior to the crisis, and—
as a result—there is less ‘need’ for such conditions to be introduced in recent IMF 
programmes. That is to say, what could—in the first instance—be interpreted as a narrowing 
scope of conditionality in the pre-crisis period is also evidence of a ‘job done’ by the IMF over 
                                                 
11
 Here, we use means rather than medians because the median was 0 for repeat borrowers 1985-2008 
and 2009-14 and for new borrowers 2009-14. 
more than two decades of structural adjustment programmes. Finally, the recent incidence of 
high-conditionality programmes and the increases in structural conditionality across IMF loans 
represent a key discrepancy between rhetoric and practice by the organization.  
 
Plus ça change: Labour issues and social protection in recent IMF programmes 
Having surveyed the general trends in conditionality, this section examines in greater detail the 
IMF’s policy advice in two areas that have attracted considerable attention in recent years: 
labour issues and social protection. First, a notable development of the past decade has been 
the rapid rise in the inclusion of poverty-reduction conditions (Figure 3). While fewer than 
10% of IMF programmes included such conditions until 1997, since then the use of these 
instruments has become prevalent. Since 2012, about 70% of all programmes included at least 
one such condition. Commonly, the conditions included in this category are formulated as 
‘priority expenditure floors’ specifying minimum expenditures on health, education and other 
social policies. The inclusion of such conditions marks a sharp shift from past practices, when 
the IMF was accused of neglecting the social consequences of its programmes. Second, on 
labour issues, after a period of relative indifference until the early 1990s, about 50% or more of 
lending programmes have carried at least one labour-related condition over the 1994–2007 
period. Interestingly, a peak for these types of reforms is noted in 2004 (included in over 70% 
of lending programmes), primarily reflecting conditions limiting the public sector wage bill. 
Since then, labour-related conditionality has declined, with circa 25-40% of programmes 
advocating such reforms in recent years.  
On the surface, this evidence on labour-related and pro-poor conditionality suggests that policy 
practice matches rhetoric, and that the IMF has fundamentally reformed the priorities of its 
policy advice. But how much of a difference have these apparent changes made on the ground? 
Here, we move beyond counting conditions to examine the exact policy content of recent 
programmes.  
(a) Social issues 
The IMF has long claimed that it is concerned about the social consequences of its policy 
advice (Camdessus 1998; de Larosière 1986; de Rato 2006), and that its programmes include 
adequate safeguards to ensure the protection of the poor (Gupta et al. 2000; IMF 1995; 2008; 
2013d; 2014f; 2015b). Indeed, poverty reduction was recognized in the name of the 
organization’s standard lending facility for low-income countries, the Poverty Reduction and 
Growth Facility (until 1999 known as the Enhanced Structural Adjustment Facility, and since 
2009 known as the Extended Credit Facility). Countries receiving financial support through 
this instrument were required to produce ‘Poverty Reduction Strategy Papers’ (Stewart and 
Wang 2003), and the design of conditionality also incorporated explicit measures to maintain 
or increase of social expenditures, as shown above (Figure 3). The inclusion of these policies in 
IMF-supported programmes does not in itself provide concrete evidence that rhetoric matches 
practice, as it could just be a smokescreen designed to deflect criticism.  
To examine the issue, we collected detailed data on the implementation of social spending 
floors applicable to IMF programmes in Sub-Saharan African countries—where most such 
conditions applied—since 2000. In total, we identified 472 such conditions applicable in 29 
countries (often on a quarterly or biannual basis), and present our findings grouped by sub-
region. As shown in Table 3, we could only trace implementation data for 362 of these 
conditions and nearly half were not implemented. In particular, the West African region 
recorded the poorest implementation, showing non-observance of 54% of social spending 
floors with available data. 
      [Table 3 here] 
According to some academic observers, the non-implementation of social spending targets is 
linked to the lack of capacity or interest by borrowing countries (e.g. Blattman 2014). 
Extending this line of argument, even if governments choose not to meet these conditions, the 
IMF will continue to provide financial support as long as the programme’s fiscal and financial 
targets are achieved. Indeed, social expenditure floors almost always feature as non-binding 
conditions, so their non-implementation does not necessarily affect access to IMF credit. While 
such an account is plausible, it neglects the potential contradictions in the IMF’s policy advice 
(e.g., overly restrictive macroeconomic targets may limit funds available for social protection) 
and conflicting statements from countries suggesting a desire to increase spending (e.g., by 
agreeing on spending increases in international fora). To evaluate this issue, we examined 
whether countries with the poorest implementation records on priority spending conditions 
were able to meet budget balance conditions. As Table 4 shows, budget balance conditions 
were consistently adhered to and often were far-exceeded, while at the same time social 
spending floors remained unmet. 
      [Table 4 here] 
The experience of high-income European countries also merits attention. All four recent 
Eurozone adjustment programmes—designed jointly by the IMF, the European Commission, 
and the European Central Bank—contained a set of measures aimed at reducing social 
spending and increasing revenues. The health sector attracted particular attention in these 
lending programmes, and provides a case in point. Countries with were asked to introduce a 
mix of health sector cuts, introduce (or increase) user fees, and tighten eligibility criteria for 
access to services (Kentikelenis 2015; Kentikelenis, Karanikolos, et al. 2014b). Despite this, 
the IMF selected the Greek case as a showcase of ‘how IMF-supported programs seek to 
protect social spending in a way that is both fiscally-sustainable and cost-effective’ (IMF 
2015b). The organization highlights that ‘several schemes have been put in place to provide 
free healthcare access, including health vouchers, poverty booklets, and universal health care 
coverage for the uninsured’ (IMF 2015b). Yet, recent evidence on each of the cited measures 
suggests that none have lived up to their promise, in part due to overly stringent or out-dated 
eligibility criteria (Economou et al. 2014; Kentikelenis 2015). 
The inadequate implementation of priority spending targets—often while budget balance 
conditions were far exceeded—and the evidence from recent lending suggests that the IMF has 
not lived up to its own hype of promoting social protection. While some progress has been 
made, blanket statements that ‘under IMF-supported programs, the Fund helps governments to 
protect and even increase social spending’ (IMF 2015b) are not supported by the data. Further, 
the organization’s view of social protection emphasises targeted social assistance (IMF 2014f; 
2015b) at a time when global policy debates around the Sustainable Development Goals are 
overwhelmingly focused towards the universal provision of key welfare services (ILO 2014a; 
2014b; UN 2012; WHO 2013; 2014). 
(b) Labour issues 
The IMF has changed its rhetoric both over the limits on government spending on salaries and 
over the merits on labour market policies. According to its staff, wage bill ceilings have been 
discontinued (Gupta 2015), and labour market policies are peripheral to many of its 
programmes (IMF 2014b). How do such statements square with the IMF’s policy advice on 
labour market issues in recent years? We draw on evidence from post-2008 IMF programmes, 
and examine the experience of developing and high-income countries in turn.  
A close examination of IMF conditionality in developing countries reveals that the IMF’s 
involvement on issues directly affecting labour is not limited, despite claims to the contrary. 
For instance, wage bill ceilings—while used less than in the past—have still been part of IMF 
programmes in Cote d’Ivoire (2009-13), Honduras (2010-11) and Moldova (2010-12). These 
conditions were incorporated into IMF programmes in a non-binding form (benchmarks), but 
were still considered by IMF staff as ‘critical’ enough for inclusion into conditionality. In 
particular, Moldova’s IMF-designed labour-related reforms included measures to ‘optimize the 
number of employees in the budgetary sector [… by] eliminat[ing] at least 4,000 positions’ in 
2010 (IMF 2010g:7), as well as further policy changes that affected civil servants (IMF 2012e).  
Moreover, a number of countries’ adjustment programmes included extensive pension reforms. 
Romania’s programme targeted pensions, including a 15% cut and a number of further changes 
to the system that would reduce pay-outs and raise the retirement age (IMF 2010l). The 
measures proved controversial (Reuters 2010), and were struck down by the country’s 
constitutional court (IMF 2010l). Yet, a few months later, the same reform package was re-
introduced as a binding prior action stipulating the ‘parliamentary approval of pension reform 
legislation’ (IMF 2010j), and was eventually passed despite objection from the Romanian 
president (IMF 2010k). Similarly, Serbia’s conditionality introduced a pension freeze between 
2009 and 2011 (IMF 2009g; 2010h), and increased retirement ages (IMF 2010i).  
The recent IMF programmes in Eurozone countries have also relied on labour-related reforms, 
including on deregulation, government wage spending, and social security systems. For 
instance, Greece’s conditionality stipulated extensive labour market liberalization. The 
country’s programme included reforms—often as prior actions—to the collective bargaining 
system, the precedence of firm-level (as opposed to sectoral) agreements, and the reduction of 
minimum wages and employee dismissal costs (IMF 2010d; 2010c; 2012c; 2012b; 2014d). 
Similarly, Portugal’s adjustment programme stipulated increases to the retirement age, 
weakening of collective bargaining, and the introduction of a ‘public administration labour law 
that will aim at aligning current public employment regime to the private sector rules…, and 
termination of tenure’ (IMF 2012d; 2013c; 2014e). 
In sum, this overview of recent IMF conditionality on social protection and labour issues 
suggests that the organization’s claims of fundamental changes to conditionality are 
exaggerated. Delving into the exact policy content of IMF programmes, we find much of the 
same policy advice that has been at the centre of controversies for decades, and we show that 
the advertised attention to social protection issues reflects more ‘talk’ than ‘walk.’ At the same 
time, the links outlined above likely understate the true magnitude of the IMF’s effects on 
labour and social protection policies: austerity measures and misconceived structural reforms 
may carry indirect—but still tangible—effects that are not captured in the pathways outlined 
above (see Kentikelenis, Stubbs, and King 2015).
12
 
 
Conclusions 
This paper utilized newly available data on IMF conditionality to revisit key debates over the 
organization’s policy advice to its borrowers. Our findings suggest that the IMF’s claim that 
programmes now ‘creat[e] policy space’ by exhibiting ‘responsive design and streamlined 
conditionality’ (IMF 2009c) is not an accurate representation of reality. The period of 
organizational insecurity preceding the global financial crisis was linked to changes in the 
IMF’s policy prescriptions, reflected in declines in conditions attached to its loans. However, 
as the crisis progressed, the IMF re-emerged as a central organization dealing with the policy 
response, and—following this boost in organizational self-confidence—the downward trend in 
conditionality reversed. Martin Wolf’s (2011) pessimistic premonition that the ‘new [and] 
cuddly’ IMF ‘can’t possibly last’ is confirmed by our data. In particular, structural 
conditionality has returned as a key component of IMF programmes and its scope has been 
widening in recent years. Further, we investigated in greater detail whether the apparent shift in 
the IMF’s practice over labour and social protection matched the evidence from country 
lending agreements. Our evidence offers grounds for scepticism. First, despite consistent 
rhetoric to the contrary, the IMF still advocates reforms that aim at labour market 
liberalization, public sector employment reduction, or reductions in government wage 
spending. Second, while IMF programmes now often include ‘pro-poor’ measures in the form 
of social spending floors, in practice these measures are only superficially incorporated into 
programme design. Data from social expenditure targets in Sub-Saharan Africa shows that they 
remain unmet half of the time, even while fiscal deficit targets are achieved. Such findings 
suggest that the IMF’s pro-poor concerns are accorded, at best, secondary importance 
compared to macroeconomic targets.  
We note three limitations of our work. First, we have purely examined the ‘supply’ of 
conditionality and weighed it against rhetoric. It is possible that some governments requested 
specific policy conditions to overcome domestic opposition to reforms (Güven 2012; Vreeland 
2003), and that some programmes were interrupted or not fully implemented (Arpac, Bird, and 
Mandilaras 2008). Future research can explore these issues in greater depth. Second, we focus 
our analysis mostly on the structural reform component of IMF programmes. The IMF’s 
                                                 
12
 Indirect pathways relate to the collateral damage of overly stringent IMF macroeconomic policy 
advice. For example, even if the level of pensions—classified as a labour issue in our data—is not 
explicitly targeted by an IMF programme, in the context of overall austerity it is plausible that some 
governments will opt to reduce pensions to cut down on public expenditure. Such pathways are difficult 
to uncover relying on our IMF documentation, and require country-specific research. 
macroeconomic policy advice—e.g., on the speed or extent of fiscal consolidation—is equally 
important. This has been explored by other recent studies (Grabel 2011; Ortiz, Chai, and 
Cummins 2011; Weisbrot et al. 2009) which found evidence of pro-cyclical policy advice that 
reduced fiscal policy space for governments. Finally, conditionality represents only the most 
visible set of IMF-induced policy constraints facing the organization’s borrowers. Indeed, IMF 
programmes include non-coercive advice in the form of technical assistance or policy 
recommendations. The extent to which such advice is actually taken on-board remains unclear.  
Our study has provided evidence of important gaps between rhetoric and practice in key 
aspects of the IMF’s lending activities. We argue that these are manifestations of an escalating 
commitment to hypocrisy. Intergovernmental organizations produce hypocrisy to safeguard 
their legitimacy, gain access to resources, and placate critics. As they do so, they become 
locked-in on a specific course of action, which—in turn—yields a layering process of 
ceremonial reforms. The IMF’s involvement in low-income countries illustrates this point. In 
the late-1990s, following criticisms of the organization’s structural adjustment programmes, 
the IMF rebranded its lending instrument as the Poverty Reduction and Growth Facility, and 
introduced ‘social spending floors’ to allay concerns over insufficient attention to the social 
consequences of its programmes. Then, in the early-2000s the IMF’s rhetoric emphasised its 
commitment to ‘creating policy space’ via ‘streamlined conditionality.’ Finally, after the onset 
of the global financial crisis, IMF programmes were purportedly ‘flexible’ and ‘tailored to 
country needs,’ not bearing any semblance to structural adjustment policies advocated in the 
past in the past, as Christine Lagarde points out in the opening quote. These iterative layers of 
rhetoric and ceremonial reforms are—in part—an attempt to maintain the myth of the 
fundamentally reformed institution.  
Documenting the production of layers of hypocrisy is the first step of a broader research 
agenda. The next step is unearthing exactly how these layers are produced (see Weaver 2008). 
Is this process spearheaded by management in collaboration with public affairs departments? 
Are middle- or low-ranking staff involved? And do the states overseeing the activities of these 
organizations condone or ignore such actions? Future research can examine these issues. 
The reform of the IMF’s practices and governance has been a topic of sustained controversy in 
international economic policy circles. We have shown that the organization has been 
particularly adept at introducing ceremonial pretences of reform. On the contrary, the 
organization’s own advice to countries has been to build up the political will and perseverance 
to carry out difficult structural reforms; this advice can now be turned inwards. 
 
 
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Appendix I. Measuring IMF Conditionality 
To capture different dimensions of conditionality, we extracted relevant information from loan 
agreements. When requesting a loan from the IMF, countries send a letter to its management 
setting out the loan specifics (e.g. amount and duration), main objectives, and associated 
conditionality. These documents—drafted by country policymakers in collaboration with IMF 
staff—are known as Letters of Intent with attached Memoranda of Economic and Financial 
Policies, and are reviewed and updated in regular intervals. For example, a program that is 
reviewed five times over its duration is linked to six Letters of Intent and Memoranda of 
Economic and Financial Policies: one for the original approval and then one for each review. 
This set of documents forms our data, and we extracted the raw text of all conditions, including 
the number of times conditions were applicable per year (relevant for quantitative conditions 
which commonly apply on a quarterly basis). Replication of coding was performed in various 
stages to ensure inter-coder reliability. Where uncertainties arose, they were discussed and 
resolved by consensus. In all cases requiring a coding decision, we opted for the most cautious 
approach (i.e. one that would understate conditionality). Missing documents were not a major 
issue: only 58 documents were missing, compared to 1,995 documents collected and coded. 
Nonetheless, these documents—still classified by the IMF—primarily relate to some of the 
most controversial loans: Argentina (1984-88, 1997, 2003), Brazil (1988, 1991, 1998-2000), 
Korea (1997-99), Philippines (1984-85, 1998), Thailand (1997-2000), and Turkey (1999-
2003). 
After the raw text of all conditions was extracted, the second stage of the coding process 
entailed classifying them into mutually exclusive policy areas (summarized in Table 2 above), 
building on practices adopted by the IMF’s Independent Evaluation Office (IEO 2007b), the 
IMF Monitoring of Fund Arrangements database and academic research, and taking into 
account the potential for miscoding. Since the classification of conditions presented a larger 
such potential, all of it was conducted independently by two researchers and then compared. 
Discrepancies were discussed and resolved by consensus. Occasionally, conditions did not 
neatly fit in a policy area. Faced with this obstacle, we had three options available to us: 
splitting the condition, classifying the condition under the policy area we considered most 
appropriate, or merging policy areas to make them more inclusive. We resorted to a 
combination of these approaches. First, we yielded approximately 250 additional conditions by 
splitting the condition text; this occurred only in cases where their content was in substantively 
different policy areas. For example, the text for a condition in Jordan’s 1999 program 
stipulated the ‘reduction in the maximum import tariff rate to 35 percent, together with an 
increase in the GST [general sales tax] rate to at least 12 percent’ (IMF 1999). This was 
subsequently split into two conditions – one on trade issues and another on tax policy. Second, 
we classified conditions under the ‘main’ policy area in the majority of instances of ambiguity. 
Common examples are budget-related conditions, like ‘submit budget law to Parliament for 
approval, including limits on government wage bill.’ In this instance, despite containing 
measures directly affecting labour, we classified this condition under the fiscal issues policy 
area. Splitting such conditions would have led to a substantial inflation of conditionality; our 
approach is more cautious. Third, where ambiguous conditions contained reforms in 
‘neighbouring’ policy areas, we opted to merge entire areas. The main examples of such 
merging are the categories ‘financial sector, monetary policy, and Central Bank issues’ and 
‘fiscal issues, revenues and tax.’ 
As noted above, the IMF has its own conditionality database, known as Monitoring of Fund 
Arrangements (MONA). This database is compiled by the IMF’s Policy Development and 
Review department (now known as Strategy, Policy, and Review department), and—over the 
years—has been criticised (Arpac et al. 2008; IEO 2007a). We sought to produce a resource 
independent of the IMF, and each condition is fully referenced to its source document to 
enhance transparency and enable replication. 
 
 
Table 1. Descriptive statistics on conditionality 
 
 Mean Median Progr-
ammes 
Highest conditionality in… 
1985 20.9 23 36 Jamaica (42 conditions), Argentina (36), Ghana (32) 
1986 20.9 17 43 Morocco (65), Zambia (63), Congo, Dem. Rep. (40) 
1987 27.3 28 35 Tanzania (49), Niger (42), Gabon, Senegal & Tunisia (40) 
1988 25.3 24 46 Tanzania (57), Togo (56), Tunisia (49) 
1989 28.8 30 50 Pakistan (87), Nepal (56), Tunisia (52) 
1990 26.7 25.5 50 Pakistan (61), Tanzania (59), Gabon (54) 
1991 26.9 25 53 Tunisia (52), Rwanda & Senegal (46) 
1992 29.7 29 54 India (62), Gabon (56), Pakistan (54) 
1993 28.4 28 48 Mauritania (73), Egypt (56), Burkina Faso (53) 
1994 36.5 36.5 60 Mauritania (76), Kyrgyz Republic (70), Albania (66) 
1995 36.3 37 67 Mauritania (88), Ukraine (78), Armenia (72) 
1996 43.9 42.5 68 Azerbaijan (93), Russian Federation (87), Georgia (70) 
1997 42.9 42 60 Kazakhstan (99), Bulgaria (89), Azerbaijan (88) 
1998 43.2 43.5 60 Russian Federation (143), Ukraine (103), Indonesia (77) 
1999 44.3 41 62 Ukraine (148), Bulgaria (99), Moldova (89) 
2000 40.8 42.5 64 Kyrgyz Republic (97), Bulgaria (87), Romania (79) 
2001 41.8 40 66 Pakistan (105), Armenia (72), Rwanda (72) 
2002 42.9 39.5 58 Romania (114), Pakistan (98), Turkey (86) 
2003 45.3 45 57 Romania (114), Pakistan (87), Macedonia, FYR (80) 
2004 43.5 47 57 Romania (126), Serbia (87), Nicaragua (74) 
2005 44.5 43 47 Serbia (122), Romania (100), Senegal (83) 
2006 39.7 41 43 Cameroon (79), Congo, Rep. (65), FYR Macedonia (65) 
2007 40.4 40 37 Cameroon (84), Dominican Rep. (77), FYR Macedonia 
(67) 
2008 30.4 33 46 Cameroon (75), Moldova (62), Haiti (60) 
2009 31.8 33 53 Cote d'Ivoire (70), Afghanistan (53), Central African Rep. 
(51) 
2010 32.9 34 60 Cote d'Ivoire & Ghana (60), Tajikistan (58) 
2011 31.6 32 50 Haiti (60), Tajikistan (58), Ghana (54) 
2012 32.5 35 45 Greece (62), Afghanistan (60), Cote d'Ivoire (59) 
2013 33.7 34.5 40 Bosnia & Herzeg. (85), Bangladesh (69), Cote d'Ivoire (68) 
2014 38.7 44 35 Bosnia & Herzeg. (92), Ukraine (64), Jamaica (63) 
 
Total 
 
35.8 
 
34.0 
  
Romania (1,231), Pakistan (1,129), Mauritania (1,058) 
 
Source: Authors’ database. 
 
Table 2. Categorization of Policy Areas 
 
 
Policy Area Description 
Number of 
conditions 
C
o
re
 P
o
li
c
y
 A
re
a
s
 
External debt issues  
Debt management and external arrears. 
15,407 
Financial sector, monetary policy, and Central Bank issues 
Financial institution regulation, financial SOE privatization, treasury 
bills, interest rates, Central Bank regulation, money supply, and 
domestic credit. 
13,948 
Fiscal issues, revenues and taxation 
Expenditure administration, fiscal transparency, audits, budget 
preparation, domestic arrears, and fiscal balance, customs 
administration, tax policy, tax administration, and audits of private 
enterprises. 
13,756 
External sector (trade and exchange system) 
Foreign reserves, trade liberalization, exchange rate policy, capital 
account liberalization, and foreign direct investment. 
4,885 
N
o
n
-C
o
re
 P
o
li
c
y
 A
re
a
s
 
State-owned enterprise privatization, reform and pricing 
Non-financial SOE privatization (incl. liquidation and bankruptcy 
proceedings), SOE restructuring, subsidies, price liberalization, audits, 
marketing boards, and corporatization and rationalization.  
3,303 
Labour issues (public and private sector) 
Wage and employment limits, pensions, and social security 
institutions. 
1,987 
Institutional reforms 
Judicial system reforms, anti-corruption measures, competition 
enhancement, private sector development, devolution, sectoral 
policies, social policies (excl. poverty reduction policies), price 
increases for food, water, public transport, or other basic needs goods, 
land registries, granting of property rights, environmental regulations 
and access to commons. 
1,357  
Poverty reduction policies 
Poverty Reduction Strategy Paper development, increases in social 
sector spending, and implementation of social safety nets. 
822 
 Total Number of Conditions 55,465 
 
Note: We also collected the conditions from so-called low conditionality facilities: First Credit Tranche 
(FCT), Emergency Assistance for Post-Conflict Situations (EAPC) and Natural Disasters (EAND), 
Systemic Transformation Facility (STF), Exogenous Shock Facility – Rapid Access Credit (ESF-RAC), 
and Rapid Credit Facility (RCF). These yielded another 1,129 conditions not included here. 
Source: Authors’ database.  
Table 3. Pro-poor spending conditions in Sub-Saharan Africa since 1995 
 
 
Total 
Of which 
implementation data 
available for… 
Of which 
implemented… 
Western Africa 283 210 97 
Central Africa 55 38 23 
Eastern & Southern Africa 137 114 64 
TOTAL 475 362 184 
 
Note: Number of targets (spending floors) reported in IMF lending programmes (often applicable on a 
bi-annual or quarterly basis). Spending floors are set for ‘priority expenditures’ that include health, 
education, and other social sectors. 
Source: Various IMF lending arrangements retrieved from the IMF Archives. 
 
Table 4. Implementation of selected conditions in West Africa since 2010 
 
Country Name Year Social spending floors 
Budget balance 
conditions (or similar)  
Angola 2010 0% [4 / 3 / 0] 100% [4 / 3 / 3] 
Benin 2011 0% [4 / 4 / 0] 100% [4 / 4 / 4] 
Burkina Faso 2011 0% [4 / 2 / 0] 100% [4 / 2 / 2] 
Burkina Faso 2013 0% [4 / 1 / 0] 100% [3 / 3 / 3] 
Chad 2014 0% [2 / 1 / 0] 0% [2 / 1 / 0] 
Cote d'Ivoire 2010 0% [4 / 2 / 0] 100% [4 / 1 / 1] 
Djibouti 2010 0% [1 / 1 / 0] 100% [1 / 1 / 1] 
Djibouti 2011 25% [4 / 4 / 1] 33.3% [4 / 3 / 1] 
Ghana 2012 0% [2 / 1 / 0] 0% [2 / 1 / 0] 
Guinea 2012 25% [4 / 4 / 1] 100% [4 / 4 / 4] 
Guinea 2013 0% [4 / 4 / 0] 100% [4 / 4 / 4] 
Guinea-Bissau 2010 25% [4 / 4 / 1] 100% [4 / 4 / 4] 
Mali 2010 0% [3 / 3 / 0] 100% [4 / 4 / 4] 
Mauritania 2010 0% [4 / 4 / 0] 100% [4 / 4 / 4] 
Niger 2013 0% [4 / 4 / 0] 75% [4 / 4 / 3] 
Niger 2014 0% [4 / 3 / 0] 0% [4 / 3 / 0] 
Sierra Leone 2013 0% [2 / 2 / 0] 50% [2 / 2 / 1] 
Togo 2010 0% [2 / 2 / 0] 100% [3 / 3 / 3] 
 
Note: Implementation rate is defined as the share of implemented conditions relative to conditions for 
which we found implementation data. Figures in brackets report—in sequence—the total number of 
conditions we identified, those for which we found implementation data, and those that were 
implemented. Multiple occurrences of conditions denote quarterly or biannual basis. Liberia (2014) and 
Malawi (2012-14) are excluded from the table because no explicit budget balance conditionality was 
attached to lending programmes.  
Source: Various IMF lending arrangements retrieved from the IMF Archives. 
 
Figure 1. Total conditions, 1985–2014 
 
Source: Authors’ database.  
 
 
 
 
Figure 2. Mean of structural conditions in IMF programmes 
 
Source: Authors’ database. 
Figure 3. Policy areas under reform in IMF programmes 
 
 
Source: Authors’ database.