The International Monetary Fund (IMF) is often thought of an institution with formal rules and procedures that guide its lending decisions based on severity of the economic problems facing borrowing countries. However, in his paper, “The Scope of IMF Conditionality”, Stone argued that the IMF is also a political organization with countries like the US intervening in lending decisions through informal processes to further their geopolitical and financial interests. To Stone, the continuous US interference has led to a “crisis of legitimacy in the IMF”. The main contribution of this paper to the larger scope of literature in relation to conditionality is the methodology as well as the organization of its variables. Although I agree with Stone that the US interferes to safeguard its own interests, but I do not see sufficient evidence/arguments to reach to the conclusion that the US has led to crisis of legitimacy in the IMF. The paper itself lacks in its theoretical development of the issue.
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There are a great many footnotes that attempt to show the logic that leads to the points of view on conditionality, but it is never clearly stated. Furthermore, the US intervention alone does not fully explain the variation in the IMF conditionality. There are other avenues that contribute to differences in loan conditions. One such is the role of Fund staff, which enjoys considerable autonomy during the negotiation, design, and proposal of fund loans. The staff prefer the scope of conditionality to be reduced somewhat, to better reflect their level of technical expertise and to negotiate large and successful programs for their career advancement. Thus, to accurately explain the variation in IMF lending, one needs to know the conditions under which the US exert the greatest influence so that a major chunk of variation in IMF conditionality can be clearly attributed to the US and not to the role of Fund staff or other factors if one is to believe that the US is responsible for the “crisis of legitimacy”. It is very clear that the author argues that the issues associated with conditionality are not entrenched in the institution, as previously supposed, but rather stem from the involvement and the increasing control of the United States in regards to the organization itself. In a sense, the author seems to argue that “informal participation” is more important and effective than the formal structure. I agree that the relationship that a borrower has with the United States, and with the IMF itself, effects the terms of conditionality, but the author does not present a complete picture on the valuation of countries. The author uses US foreign aid expenditures in relation to that country to determine strategic importance, but it is important to note that it may not present a complete picture because of the limits of the amount of years included in this study. It would be interesting to see if there are other valuations that are important, and further break this study down and look at it on a regional as …show more content…
However, it is still not clear if this results in the US continuously interfering in the IMF operations to the extent that it creates the crisis of legitimacy or just reserve its power for special occasions. Several other important actors might also influence IMF policies but, ultimately, there is no single mechanism of control that accounts for all the actions of the IMF. Decisions about the conditions for the loans emerge from the interaction of economic policy, bureaucratic, international and domestic
There are a great many footnotes that attempt to show the logic that leads to the points of view on conditionality, but it is never clearly stated. Furthermore, the US intervention alone does not fully explain the variation in the IMF conditionality. There are other avenues that contribute to differences in loan conditions. One such is the role of Fund staff, which enjoys considerable autonomy during the negotiation, design, and proposal of fund loans. The staff prefer the scope of conditionality to be reduced somewhat, to better reflect their level of technical expertise and to negotiate large and successful programs for their career advancement. Thus, to accurately explain the variation in IMF lending, one needs to know the conditions under which the US exert the greatest influence so that a major chunk of variation in IMF conditionality can be clearly attributed to the US and not to the role of Fund staff or other factors if one is to believe that the US is responsible for the “crisis of legitimacy”. It is very clear that the author argues that the issues associated with conditionality are not entrenched in the institution, as previously supposed, but rather stem from the involvement and the increasing control of the United States in regards to the organization itself. In a sense, the author seems to argue that “informal participation” is more important and effective than the formal structure. I agree that the relationship that a borrower has with the United States, and with the IMF itself, effects the terms of conditionality, but the author does not present a complete picture on the valuation of countries. The author uses US foreign aid expenditures in relation to that country to determine strategic importance, but it is important to note that it may not present a complete picture because of the limits of the amount of years included in this study. It would be interesting to see if there are other valuations that are important, and further break this study down and look at it on a regional as …show more content…
However, it is still not clear if this results in the US continuously interfering in the IMF operations to the extent that it creates the crisis of legitimacy or just reserve its power for special occasions. Several other important actors might also influence IMF policies but, ultimately, there is no single mechanism of control that accounts for all the actions of the IMF. Decisions about the conditions for the loans emerge from the interaction of economic policy, bureaucratic, international and domestic