Completion and Conditionality: A Parsimonious Analysis of IMF Programs

A feature of IMF programs is the relatively large proportion that are not carried through to completion. One explanation is that excessive conditionality undermines ownership and commitment to IMF-favored policy reform. The IMF’s “streamlining” initiative in the early 2000s was intended to limit conditionality and thereby improve the completion rate. This paper empirically investigates the relationship between conditionality and completion. For the full period, 1980–2019, it discovers no statistically significant relationship between them at the aggregate level. It goes on to examine the ways in which this result can be interpreted and discusses the implications for reform.