Ideas to Action:

Independent research for global prosperity




February 21, 2006

The Role of the IMF in Well-Performing Low-Income Countries - Working Paper 83

CGD senior fellow Steven Radelet discusses how the IMF can be helpful to low-income countries that have maintained macroeconomic stability for several years and no longer require IMF financing. He suggests that the Fund move toward greater use of non-funded programs and play a less dominant role in overall conditionality, while continuing to work with countries to ensure an appropriate macroeconomic framework. He argues, however, that the Fund should not provide grants to these countries.

In a related paper (A Stability and Growth Facility -Working Paper 77), Nancy Birdsall and Kemal Dervis propose an IMF Stability and Growth Facility to help high-debt, mostly middle-income countries maintain credibility in the markets through fiscal discipline, in part to reduce their debt burden, while also addressing longstanding social needs.

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