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What Have We Learned from Expenditure Conditionality in IMF Programs?

As part of borrowing from the IMF, the IMF and the country that is borrowing agree on the implementation of certain policies (conditions) during the program period. The implementation of some conditions is not essential for the continuation of the program, including some pertaining to budgetary expenditures. Their implementation often vary from country to country, and the empirical analysis shows that certain budgetary conditions achieve their intended objectives over the long term, while others do not. In this blog, I explain which budget conditions work, and which don’t work.