The completion rate of IMF programmes: What we know, don't know and need to know

The International Financial Institution Advisory Commission (IFIAC) has advocated that IMF conditionality should be abandoned because it is ineffective. This apparently straightforward and unequivocal diagnosis and equally clear-cut policy recommendation in fact raises numerous questions. Fundamental amongst them are, first, is this assessment of the effectiveness of conditionality reasonable on the basis of the available evidence? Second, if it is, does the policy recommended by the IFIAC necessarily follow on from it? However, there is another central question. If conditionality is relatively ineffective in terms of influencing key macroeconomic variables, does this reflect weaknesses in the design of IMF programmes or in their implementation? Section 2 briefly reviews the evidence on the effectiveness of IMF conditionality but focuses on the completion record of IMF programmes. Section 3 raises the question of the extent to which non-completion should be a cause for concern. Following earlier work by the author (Bird, 1998), Section 4 goes on to provide a simple framework within which completion may be analysed. Section 5 discusses the policy implications of the analysis, while Section 6 concludes by reviewing what we know, don't know and need to know about the completion rate of IMF programmes.