Does the IMF intervention really help the economies in crises? A critical study of the IMF’s lending conditionality

Abstract

In the past few decades, the International Monetary Fund has been criticized for a variety of reasons. One of the criticisms is directed towards the conditionality imposed by the IMF on its member countries in economic distress. A simple analogy to this criticism is that the IMF is criticized for being the doctor who prescribes the same ‘pill’ irrespective of the disease. As the title of our study suggests, our primarily goal is to analyze the effectiveness, or rather the appropriateness, of the policies advised (imposed) by the IMF. We will also look at the other forms of criticism of IMF and try to correlate or negate it with our findings. It’s important to point out that this study is not aimed at proving the critics of the IMF right or wrong. Our goal is to look the country specific data available in the public forum, to try and draw some conclusions regarding the relevance of an IMF program in the socio-economic setting of the borrowing country. To put things into perspective, it’s important to know what the IMF does and what exactly is its lending program.