Conditionality and design of IMF-supported programmes.
Date: 2019-06-10
Institutions: European Central Bank
Subjects: International Monetary Fund, economic growth, economic support, financing, loan, macroeconomics

Occasional Paper Series 

IRC Task Force on IMF and Global Financial 
Governance Issues 

Conditionality and design of 
IMF-supported programmes 

No 235 / October 2019 

Disclaimer: This paper should not be reported as representing the views of the European Central Bank (ECB). 
The views expressed are those of the authors and do not necessarily reflect those of the ECB. 

 
 
 
 
 
 
Contents 

Abstract 

Non-technical summary 

1 

2 

Introduction 

IMF conditionality: the rationale 

2.1  Solving b.o.p. problems and safeguarding IMF resources 

2.2  Catalysing other sources of financing 

2.3  Preventing moral hazard 

2.4  Political economy considerations 

Box 1 Alternatives and complements to standard conditionality 

Box 2 IMF lending and perceived stigma 

3 

Implementing IMF conditionality: institutional aspects 

3.1 

3.2 

The main elements of the conditionality process at the IMF 

The Guidelines on Fund conditionality: key principles and 
conditionality reviews 

3.3  Main issues for the 2018 Review of Conditionality 

Box 3 The development of IMF conditionality: a historical overview 

Box 4 Conditionality and programme design for using IMF and ESM 

resources: a comparison 

4 

The empirical evidence 

4.1  A non-technical review of the empirical literature 

4.2 

IMF-supported programmes: main features and economic 
outcomes 

Box 5 Measuring country ownership 

Box 6 Measuring the success of GRA-funded programmes 

Box 7 The Greek adjustment programmes and IMF conditionality 

Box 8 Case Study Pakistan 

5 

Lessons, policy considerations and open issues 

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References 

Annex 1 

Tables and charts 

Annex 2 

Additional tables and charts 

Annex 3 

List of programmes: 2008-18 

Annex 4 

Data sources and variables 

A 

B 

Variables on programme conditionality 

Variables on macroeconomic outcomes 

List of acronyms 

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Abstract 

Conditionality is at the very heart of IMF lending and has been the subject of intense 
debates ever since the Fund’s inception. Its success is of crucial importance not only 
for countries’ chances of achieving the goals of IMF lending programmes, but also for 
the credibility of the Fund as a trusted adviser. This report provides information and a 
set of facts on the IMF arrangements approved after the global financial crisis, with a 
focus on ex post conditionality and on arrangements primarily financed through the 
General Resources Account (GRA). The analysis shows that between 2008 and 
2018, the characteristics of IMF programmes evolved with the macroeconomic 
context; in particular, a tendency towards more structural conditionality and longer 
programme implementation horizons has emerged. In the aftermath of an IMF 
programme, all relevant macroeconomic variables tend to improve compared with the 
pre-programme period; in particular, external and fiscal positions improve 
considerably and growth typically rebounds, inflation declines and net private capital 
inflows stabilise or recover slightly. However, the improvement has generally fallen 
short of expectations, especially in terms of GDP growth and debt reduction. One 
area in which the effectiveness of IMF programmes has proven less than satisfactory 
is with serial borrowers, i.e. countries that fail to graduate from IMF financial 
assistance in due course. This highlights the importance of further analysing the 
factors behind the success of IMF programmes and points, inter alia, to the need to 
design and sequence the structural conditions attached to Fund loans more 
effectively. 

Keywords: International Monetary Fund, IMF programmes, IMF conditionality 

JEL codes: F3, F5 

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Non-technical summary 

Conditionality is at the very heart of IMF lending and has been the subject of 
intense debates ever since the Fund’s inception. Its success is of crucial 
importance not only for countries’ chances of achieving the goals of IMF lending 
programmes, but also for the credibility of the Fund as a trusted adviser. The IMF 
periodically reviews whether conditionality – and the design of its programmes – are 
implemented in a way that contributes to the effectiveness of its lending activity. This 
report has been prepared by the IRC Task Force on IMF and Global Financial 
Governance Issues in parallel with the IMF's 2018 Review of Program Design and 
Conditionality (ROC); the latter was eventually discussed by the Fund’s Executive 
Board only after this report had been finalised (IMF, 2019). 

This report provides information and a set of facts on the IMF arrangements 
approved after the global financial crisis. It was intended as an input to help 
European authorities forge their positions on the key themes expected to be 
discussed in the 2018 ROC. 

Standard (ex post) conditionality in IMF-supported programmes refers to the 
domestic policy adjustments required to use Fund resources. The IMF’s 
Statutes (Articles of Agreement, AOA) attribute paramount importance to solving its 
members’ balance of payments (b.o.p.) problems while protecting its own financial 
resources. Conditionality represents a crucial means to achieve these “dual” and 
mutually supporting objectives. Another important rationale for IMF conditionality 
relates to its presumed ability to give countries’ policies its seal of approval and to 
catalyse other sources of financing. Containing the risk of moral hazard attached to 
IMF financing arrangements is an additional argument supporting Fund conditionality. 
Finally, several political economy considerations provide further insights into the 
working of IMF conditionality. 

The empirical literature suggests that countries’ external and fiscal balances 
generally improve as a result of IMF lending programmes, but outcomes in 
terms of growth and net capital inflows remain somewhat mixed. In this latter 
respect, country fundamentals do matter in determining the effects of IMF 
programmes, as shown by the fact that, after the global financial crisis, worsening 
country fundamentals entailed larger and longer programmes and more difficult 
structural challenges, and were thus associated with a higher probability of 
non-compliance and programme failure. Although the findings of this report confirm 
that countries’ post-programme economic performance has tended to improve, the 
fact remains that IMF staff projections for growth and the public debt ratio formulated 
at programme approval turned out to be too optimistic in most cases. That said, it is 
worth pointing out that the empirical analysis of the effectiveness of IMF lending 
arrangements is hampered by measurement difficulties, lack of adequately granular 
data and methodological problems. 

During the period reviewed, the characteristics of IMF programmes evolved 
with the macroeconomic context. In the last few years, a tendency towards more 

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structural conditionality and longer implementation horizons has emerged. The first 
years after the global financial crisis (2008-12) saw a much larger number of 
exceptional access (EXA) programmes, required by countries with large imbalances 
and with an urgent need to stabilise their economy, which translated into a higher 
weight of macro conditionality. However, going beyond the specific financing needs of 
this particular period, and against a background of increasing global 
interconnectedness and economic complexity, programmes approved after 2012 
have reverted to more structural conditionality and implementation horizons have 
lengthened, as illustrated by the increase in the use of Extended Fund Facilities 
(EFFs) relative to standard Stand-By Arrangements (SBAs). 

The comparison of conditionality and economic outcomes across specific 
categories of programmes (including EXA programmes, euro area 
programmes, SBAs versus EFFs, precautionary SBAs, programmes involving 
debt restructuring and “serial borrowing”) provides further insights. Such 
insights include: 

• 

Fund resources committed to euro area programmes in the sample accounted for 
over 50% of total GRA committed resources in 2008-12; this fraction fell 
drastically after the completion of the arrangements for Greece, Ireland and 
Portugal. Euro area programmes were mostly of an EXA type and shared most of 
the characteristics of post-global financial crisis programmes, although they 
featured a larger share of financial sector conditions. 

•  More generally, during the period considered, EXA programmes entailed more 

conditions, relied to a larger extent on prior actions and showed somewhat lower 
levels of compliance, in comparison with normal access cases. In addition, the 
associated improvement in economic variables seemed to take longer (including 
with the presumed catalytic effect on private capital flows) than would be natural 
to expect in the case of countries affected by more severe imbalances and 
deteriorating market access. 

• 

• 

The number of programmes for countries undergoing some form of debt 
restructuring increased at the height of the global financial crisis and remained 
relevant in terms of Fund resources. The analysis suggests that these 
programmes helped countries to improve their fiscal position and restore growth. 
However, experience to date is limited to small and non-systemically relevant 
countries, and the conditions under which debt restructuring constitutes a critical 
factor for the success of IMF programmes is pending study. 

According to the preliminary analysis of “serial borrowing” programmes 1 
presented in this report, those programmes followed by successor arrangements 
that were associated with persisting b.o.p. imbalances – and those successor 
arrangements themselves – perform rather poorly compared with the remaining 
programmes. This report sheds some light on the circumstances affecting the 
ultimate success of IMF arrangements. 

1    Namely strings of IMF programmes approved for the same countries over a relatively short period of time. 

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Turning to some of the issues that figure prominently in the 2018 ROC, this 
report highlights the following related lessons or questions. 

First, the analytical strategy proposed by the IMF for measuring programme 
success appears to be a step in the right direction. This strategy rests on two 
pillars: one comprises the existence and characteristics of successor programmes (to 
determine the persistence of b.o.p. problems over time); the other comprises the 
changes in countries’ vulnerability ratings before and after a programme. 

Second, better design of structural conditionality is critically needed to ensure 
adequate prioritisation of policies and reduce uncertainty concerning the 
programme country’s capacity to implement the measures effectively. Previous 
research by the IMF has also found that the depth of conditions is inversely related to 
their number – namely to parsimony. Nevertheless, the relative importance of 
parsimony versus the depth of conditionality has to be more convincingly analysed. 
This includes the need to adequately sequence structural reforms in order to achieve 
success and to form realistic expectations about the time necessary for them to work, 
as shown by the experience of euro area programme countries. On a more general 
note, more work remains to be done to make more realistic assumptions and reduce 
the repercussions of projection errors on policy design. The measurement of these 
critical concepts is the subject of ongoing work by the Fund. 

Third, national ownership is obviously crucial for programme success but is 
especially difficult to measure. The relationship between the number of conditions 
and ownership, and how social acceptance could be enhanced by transparency, 
communication and clear distribution of adjustment costs is another link to be studied 
further. Tackling the perception of stigma through engagement and better 
communication is another important aspect. 

Fourth, there are relevant open questions on the possibility of lengthening IMF 
arrangements, an issue that has surfaced in the discussions on the 2018 ROC. 
On the one hand, the length of programmes might be flexibly designed in order to 
allow more space for authorities’ decisions and more time for policies to have an 
economic impact. On the other hand, longer EFF-funded programmes have several 
potential downsides, including reform fatigue, delaying needed adjustments or raising 
programme implementation risks. Experience in this regard is not encouraging, since 
so far very few four-year programmes have been concluded successfully. 

Finally, on the quality of fiscal conditionality and the role of debt restructuring 
in IMF programmes. The empirical literature points to the fact that to be sustainable, 
fiscal adjustment has to go beyond short-term measures and address the fiscal 
vulnerabilities of programme countries on both the expenditure and the taxation 
sides. As to the role of debt restructuring – or of debt reprofiling – in ensuring the 
success of Fund programmes, caution is called for against adopting a general 
strategy on this issue; a case-by-case approach should continue to be preferred. 

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1 

Introduction 

Conditionality is at the very heart of IMF lending and has been the subject of 
intense debates ever since the Fund’s inception. The Fund periodically reviews 
whether conditionality – and, more generally, the design of its programmes – are 
implemented in a way that contributes to the effectiveness of its lending activity. 
When preparing this report, the last completed Review of Conditionality and the 
Design of Fund-Supported Programs (ROC) dated back to 2011 and the Fund’s staff 
was engaged in a new review (the 2018 ROC). The 2018 ROC was discussed by the 
Executive Directors of the IMF after this report was finalised on 3 May 2019. 

The principal objective of the IRC Task Force was to inform European 
authorities about the key issues involved in the 2018 ROC, and provide them 
with the necessary background to substantiate their positions in the coming 
debate. Within this scope, the report aims to provide information and evidence to 
help assess the effectiveness of Fund-supported programmes and conditionality in 
the post-2008 period, without attempting to reach or pre-empt the conclusions of the 
Fund’s review. The report acknowledges the relevance of the IMF’s policies on 
conditionality and design of Fund-supported programmes for its member countries 
around the globe. As far as possible, it takes a European perspective. In particular, it 
provides a brief comparison between the way the IMF designs conditionality and how 
conditionality has been applied in European funded programmes, and places 
particular focus on IMF programmes with European countries in the empirical section. 
In addition, it provides a brief overview in Box 7 of IMF conditionality in the Greek 
adjustment programmes. 

The IMF’s ROC normally covers standard (ex post) conditionality2  and 
programme design. Conditionality is the set of policy measures under the control of 
national authorities which are required by the Fund as a condition for the use of its 
own resources, with the objective of enabling the borrowing country to resolve its 
b.o.p. difficulties while repaying the Fund in a timely manner. The design of IMF 
programmes is strictly related to conditionality but is a wider concept. Broadly 
speaking, programme design has to do with the way in which the intended domestic 
policy adjustment is combined with the provision of both official and private 
financing – including the possibility of reprofiling or debt restructuring if needed. Thus, 
it includes a variety of additional aspects such as assessing the country’s external 
financing needs, analysing debt sustainability and related risks, and choosing the 
relevant lending facility, the amount of financing and the schedule of disbursements 
(phasing). Moreover, approval of access to Fund resources requires that the Fund be 
satisfied that the member’s programme is consistent with the Fund’s provisions and 
policies and that it will be carried out, and in particular that the member is sufficiently 
committed to implementing the programme. 

2   

In IMF jargon, this type of conditionality is also called “upper credit tranche” conditionality because all 
Fund members can draw unconditionally on their own credit tranche positions at the IMF. 

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This report adopts a narrower focus than in the Fund’s ROC. In particular, it 
considers only arrangements financed through its General Resources Account 
(GRA) (i.e. those agreed to address countries’ b.o.p needs as mandated by the 
Articles of Agreement) and not concessional programmes financed by the Poverty 
Reduction and Growth Facility (PRGT), which have different purposes and financial 
terms. “Blended” arrangements, based on a mix of GRA and PRGT resources, are 
taken into consideration whenever the GRA component is at least 50% of total 
funding. In line with the present IMF Review, this report refers only to programmes 
with “ex post” conditionality, including “precautionary” SBAs (whereby countries make 
a non-binding commitment not to draw Fund money). IMF arrangements which are 
granted to countries on the basis of prequalification criteria (“ex ante” conditionality) 
will not be considered in this report. 3 

IMF conditionality and programme design are very important to the Fund’s 
shareholders and to central banks, which usually have a direct financial stake 
in this institution. 4  Members are strongly interested in reducing the likelihood or 
mitigating the effects of possible crises, including by ensuring that countries with b.o.p 
problems approach the IMF in a timely manner and adjust their own policies to solve 
these problems. Members also have an obvious interest in ensuring that IMF 
resources are used in a temporary fashion and that all borrowing countries are in a 
position to repay the Fund. When designing programmes and defining conditionality, 
a careful balance needs to be found to discourage countries from approaching the 
Fund too late while always requesting domestic policy adjustments that can 
effectively address their underlying imbalances. 

The report is organised into five main sections. After this introduction, Section 2 
describes the rationale behind the use of conditionality in IMF programmes, mainly 
related to the need to ensure that countries under programmes solve their 
b.o.p. problems and that IMF resources are safeguarded. Section 3 provides an 
overview of the Fund’s institutional framework for conditionality, including a brief 
description of its historical development and a comparison with the conditionality 
attached to ESM/EFSF resources. Section 4 deals with the empirical part: starting 
from the existing empirical literature, the section highlights the findings of an analysis 
of available data and a few case studies to set the frame for the evaluation of the 
Fund’s review. Section 5 concludes with key findings and policy recommendations. 

3    Arrangements belonging to this category are those financed by the Flexible Credit Line (FCL) and the 

Precautionary Liquidity Line (PLL). 

4    The institutional role and competencies of central banks vis-à-vis the IMF vary from country to country. In 
a good number of cases, the central bank is entrusted with representing the country at the Fund. More 
generally, the IMF-related responsibilities of central banks include holding the country's assets and 
liabilities vis-à-vis the IMF, with quotas and special drawing rights (SDR) holdings recorded on their 
balance sheet. 

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2 

IMF conditionality: the rationale 

Conditionality in IMF-supported programmes refers to the domestic policy 
adjustment required to use Fund resources. The lending function is instrumental 
in achieving the Fund’s purposes, as stated in its Articles of Agreement: “to give 
confidence to members by making the general resources of the Fund temporarily 
available to them under adequate safeguards, thus providing them with the 
opportunity to correct maladjustments in their b.o.p. without resorting to measures 
destructive of national or international prosperity” (Article I(v)). Conditionality is 
intended to ensure that Fund resources are provided to members to assist them in 
resolving their b.o.p. problems in a manner that is consistent with the Fund’s Articles 
and that establishes adequate safeguards for the temporary use of the Fund’s 
resources (IMF Guidelines on Conditionality, para. 1). In this sense, acceptance of 
conditionality can be seen as a kind of collateral provided by the country receiving 
financial assistance from the Fund, including in the light of uniform lending rates 
charged to countries independently of their risk. 

However, IMF conditionality is more than just collateral for IMF lending. The 
literature has identified a number of further arguments that provide a rationale 
for IMF conditionality. The main argument refers to its presumed catalytic effect on 
private capital flows. From another perspective, conditionality may also be seen as a 
tool to prevent or contain moral hazard that could otherwise arise as a result of “easy 
access” to external financial assistance. On the other hand, conditionality also has 
potential downsides, such as the risk that countries may perceive a stigma and avoid 
or delay negotiating their economic policies with the Fund in exchange for financing. 
Stigma and the possibility of finding alternative or complementary instruments to 
conditionality in Fund programmes are explored in Boxes 1 and 2. 

2.1 

Solving b.o.p. problems and safeguarding IMF resources 

The Fund’s Articles attribute paramount importance to solving its members' 
b.o.p. problems while protecting its own financial resources. Conditionality is a 
crucial means of achieving these “dual” and mutually supporting objectives.5  In fact, 
the successful completion of Fund programmes increases the chances that its 
resources will be used only temporarily and that the IMF will be repaid as scheduled – 
a key objective for a “credit cooperative” such as the IMF, whose resources accrue 
mainly from the quota subscriptions of its members, and a key element in ensuring 
that member countries can treat their IMF positions as international reserves. In this 
way, conditionality ensures responsible lending while reassuring the requesting 

5    The legal basis for Fund conditionality is provided by Article V, Section 3(a), which is often read in 

conjunction with Article I (v). Article V requires the Fund to adopt policies that will (i) assist members to 
resolve their BOP problems in a manner consistent with the provisions of the Articles of Agreement, and 
(ii) establish adequate safeguards for the temporary use of the Fund’s general resources. Consistent with 
this requirement, conditionality is designed to ensure that the member takes the necessary steps to 
resolve its BOP problem within a time frame that will enable it to repay the Fund. 

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member that it has continued access to IMF financing if it complies with conditions at 
the same time (IMF, 2005). 6 

To be sure, over the years the IMF has developed a number of additional 
policies and procedures to protect its resources and contain the related credit 
risk, as mandated by its AOA. Tools designed to address the borrowers’ willingness 
or ability to repay include: the exceptional access framework, compliance with 
financing assurances, the charges and surcharges structure, the post-programme 
monitoring exercise, the lending into arrears policy, the build-up of precautionary 
balances, safeguards assessments, and the remedial measures applied to members’ 
overdue financial obligations.7 

The Fund also enjoys a de facto “preferred creditor status” (PCS), which is 
recognised by the international financial community on a voluntary and informal basis 
in consideration of the general interest functions performed by the IMF (Martha, 1990) 
and the expectation that an IMF engagement in a country will strengthen its prospects 
of overcoming its b.o.p. problems – and thereby becoming sufficiently strong again to 
repay other creditors as well. As a result of this status, borrowers that fail to repay the 
Fund would incur additional costs (e.g. through longer periods of exclusion from key 
financial markets). The IMF would also obtain additional protection against possible 
legal attachments over the repayment flows of its loans (for example, via political 
pressure on the relevant courts). As is evident, however, the protection offered by this 
PCS does not relieve the Fund of the need to manage its resources in a prudent and 
effective manner; otherwise, the reputational costs for the IMF would lessen the 
support it receives from the international financial community. 

2.2 

Catalysing other sources of financing 

Another important rationale for IMF conditionality relates to its presumed 
ability to support the propensity of official and private investors to lend to 
programme countries. 8  By acting as a “delegate monitor” (Tirole, 2002) that gives 
the country’s policies its seal of approval, IMF conditionality assures private and 
official creditors that debtor countries will adopt policies consistent with the objective 
of regaining external viability and debt sustainability. The signalling/catalytic function 
is particularly attractive from a policy perspective, as it works in the very best interest 
of both the Fund and its borrowers. On the one hand, the IMF can economise the use 
of its financial resources. On the other hand, borrowers can either adjust their current 
account balance at a slower pace, if they are able to maintain access to private 

6    Beyond conditionality, borrowing members that already have access to private capital markets do have 

strong incentives to repay the Fund in a timely manner, with a view to preserving their own 
creditworthiness (Buira, 2003). 

7    Up to a possible compulsory withdrawal from the Fund for protracted cases of non-cooperation with the 

IMF, as stated in Article XXVI, Section 2 (IMF, 2000, Box 3). 

8    The notion of catalytic finance took hold in the 1980s in the context of increased financial liberalisation 
and capital mobility, as it became clear that the size of the overall financing gap of IMF programme 
countries was conditional on the credibility of the economic adjustment. 

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capital markets during the life of the programme, or regain access to these markets 
faster than would be the case in the absence of signalling/catalytic effects.9 

There are at least two ways in which Fund programmes can play a signalling or 
catalytic role. First, the mere fact that the debtor country is redirecting its policies 
towards a more appropriate regime should entice private capital inflows.10  Second, 
IMF conditionality is a “contract-like” multi-period commitment mechanism that helps 
address information asymmetries between borrowers and creditors and the related 
potential for time inconsistency in the behaviour of national authorities. In both cases, 
IMF conditionality can be seen as a signalling device that helps investors to screen 
and monitor their debtors.. 

However, the empirical evidence about catalytic effects is mixed (see 
Section 4.1). Several reasons have been identified to explain why these effects may 
not materialise in practice: (i) conditionality usually has a contractionary effect on the 
economy in the short run; (ii) it may sometimes point to country problems that were 
not originally anticipated by the market (see Box 2, on stigma); (iii) the presence of 
catalytic effects also depends on the actual design of specific adjustment 
programmes; if private creditors believe that the probability of default remains high 
because of persisting bad fundamentals, they will withdraw their investments despite 
the IMF’s financial support (Corsetti et al., 2006); and (iv) when IMF financing covers 
a large part of the funding needs of a distressed country, private investors may 
anticipate that, for any given probability of default/restructuring, their repayment 
prospects will be worsened by the Fund’s preferred creditor status; as a result, they 
will be hesitant to maintain their exposure and this will lead to an immediate 
deterioration in market access (Modi and Saravia, 2003). 

Correctly assessing the Fund’s signalling/catalytic effect is important in order 
to improve the design and management of its programmes. Fund arrangements 
are designed with specific assumptions about how the relevant economic variables 
will behave in the future. If additional private and official financing is assumed to 
accrue as a result of the programme but it fails to materialise, meeting the other 
benchmarks will be more difficult, thereby prompting further adjustment. 

However, improving the signalling/catalytic role of conditionality is not a 
straightforward task. On the one hand, it would seem that to act as a multi-period 
commitment mechanism, conditionality would need to be predetermined without 
granting policy waivers too frequently (Section 3.1). On the other hand, the need to 
adjust programme parameters to evolving circumstances is evident. Indeed, the 
adaptability of conditionality, combined with strong national ownership and careful 
communication strategies, are of the essence. 

9    Not surprisingly, continuing capital market access (or its prompt restoration) represents one of the four 
substantive criteria for justifying IMF loans beyond normal limits, i.e. its “exceptional access policy”. 
10    Moreover, the function of liquidity provision provided by the IMF also allows countries to push through 

reforms that in the absence of financial support would be too costly to implement (Morris and Shin, 2006). 

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2.3 

Preventing moral hazard 

Another argument supporting Fund conditionality is the need to contain the 
risk of moral hazard attached to its financing arrangements. The literature 
identifies two types of moral hazard related to IMF lending: (i) debtor moral hazard, 
which refers to the potential behaviour of governments requesting Fund support to 
simply avoid or delay reforms needed to restore economic viability; and (ii) creditor 
moral hazard, which refers to the potential behaviour of creditors who would continue 
to lend to a country despite the lack of convincing policy reforms as they expect the 
country to (continue to) have access to IMF resources (Dreher, 2006). Some authors 
even suggest that moral hazard can arise with respect to third parties: if a crisis 
generated in one member country has negative spillovers on other countries, the 
Fund’s intervention may reduce the incentives for prevention and lead to collective 
inaction (Jeanne et al., 2008). 

Making IMF funding conditional on specific and agreed policy actions 
contributes to reducing the risk of moral hazard. However, the fact that 
programme conditions are negotiated by the finance ministry and central bank 
representatives while implementation may be partly in the hands of other 
stakeholders (such as other public agencies, the private sector, trade unions or 
non-governmental organisations) may weaken this effect in borrowing countries.11 

2.4 

Political economy considerations 

The academic literature has also debated conditionality based on political 
economy considerations. According to one of these views, IMF programmes and 
their conditionality represent a mechanism by which the Fund exerts its financial 
leverage to induce the authorities to implement reforms that they would not 
implement otherwise. This argument is presented sometimes as “paternalism”, 
whereby conditionality is applied to ensure that the country implements what the 
Fund believes to be the most appropriate policy actions. In any case, the authorities’ 
readiness to accept such reforms may depend on the political situation. First, these 
conditions can be perceived as too intrusive, infringing on the country’s sovereignty. 
Second, as stressed by the principal-agent theory, an agent will do a better job for the 
principal if the two parties’ objectives are closely aligned. In the context of 
conditionality, the agents’ ownership of the policy reforms may be lower if they are 
imposed by the principal, reducing the effectiveness of such conditionality in inducing 
economic reform. 

On the other hand, another argument presented in the literature is that country 
authorities could use the IMF as a scapegoat for unpopular reforms. In other 
terms, conditionality would operate as a means to strengthen the reform policy 
agenda of policymakers in cases where domestic opposition to proposed reforms is 
particularly high or the political cost of implementing such reforms is considered 
excessive. 

11    This means that the IMF faces a “moral hazard in teams” (Holmström, 1982). 

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Box 1 
Alternatives and complements to standard conditionality 

Conditionality is one of the most contentious issues in the relationship between the Fund and 
borrowing countries: it encroaches on countries' sovereignty, it may exacerbate the perception of 
IMF stigma (Box 2) and it is not always effective in inducing economic reform or restoring confidence. 
However, conditionality has become an integral part of programme design and there is a broad 
consensus that financing is conditional on policy commitments. 

Ex ante conditionality is a specific case in this regard. It allows the Fund to assist countries that 
meet certain qualification criteria, essentially strong fundamentals and policies, without requesting 
specific policy adjustments. This approach has the advantage of reducing the perception of 
intrusiveness of ex post conditionality, but results in a much narrower set of potential borrowers 
unless the qualification criteria were substantially lessened. For this reason, this type of conditionality 
will never be an alternative to standard conditionality. Ex ante conditionality has made its way through 
the introduction of the Flexible Credit Line (FCL; 2009) and the Precautionary Liquidity Line (PLL; 
2010). 

This box briefly discusses a few approaches that have been put forward in the academic literature to 
replace or supplement regular conditionality, additional to the policies and procedures mentioned in 
the main text. 

As an alternative to detailed ex post conditionality, Williamson (2000) suggested linking a 
liquidity facility intended to prevent contagion to countries’ adherence to certain codes of 
best practice. Examples of this proposal (not explicitly considered by that author) could be to link 
Fund lending to adherence to the voluntary Reports on the Observance of Standards and Codes 
(ROSCs) or, as in Kenen (2000), to the successful completion of countries’ Financial Sector 
Assessment Programmes. 

Use of collateral. Feldstein (2002) and Meltzer (1998) proposed replacing conditional lending with 
lending against collateral (e.g. financial assets, tax revenues, oil revenues, etc.). The AOA envisage 
the pledge of collateral – in addition to conditionality – in cases of high risk with waivers of conditions 
involved.12  This option protects IMF resources but does not ensure that the funds are used to carry 
out the necessary adjustments and reforms. If assets were sufficiently liquid, the country might in fact 
sell them or draw on alternative sources before requesting IMF financing (Goldstein, 2000). 

Self-imposed conditionality. Eldar (2005) has proposed simplifying the drafting of ex post 
conditionality (which usually entails negotiations between the Fund and the authorities) by letting the 
country authorities devise their own preferred policy adjustment; the IMF would then assess whether 
these measures meet a certain standard of “reasonableness” before approving the programme and 
its subsequent reviews. This proposal would preserve countries’ sovereignty, secure their policy 
commitment (i.e. their “ownership) and yield a more transparent process. However, the 
reasonableness criterion is vague and there is no guarantee that its use would lead to a greater 
number of less controversial processes. 

12    Cf. Article V Section 4 on the pledge of collateral security as a condition for a waiver of conditions 

governing the use of the Fund’s general resources set out in Article V Section 3(b)(iii) and (iv) of the 
AOA. 

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With the sole exception of ex ante conditionality based on qualification criteria, none of these 
proposals have been endorsed by the Fund’s Executive Board, as they do not satisfy all the statutory 
and institutional requirements for accessing Fund resources. Within the Fund, there is a broad 
consensus on the need for IMF financing to be conditional on a series of policy commitments. 

Box 2 
IMF lending and perceived stigma 

One of the reasons why members with b.o.p. difficulties may hesitate to approach the IMF is 
the stigma they associate with Fund-supported programmes. More precisely, IMF stigma refers 
to the discredit or taint that some countries feel they will attract by seeking IMF assistance. Countries 
fear that this taint will bring a backlash, either from the electorate (political stigma) or from financial 
markets (financial market or economic stigma) (Andone and Scheubel, 2019). 

The perception of stigma can interfere with the Fund’s effectiveness in several ways. First, it 
may deter members from approaching the Fund until a crisis is well underway. Any hesitation in 
turning to the IMF in the event of crisis impairs its role as part of the global financial safety net. 
Second, perceived stigma is likely to be inversely related to national ownership, i.e. countries’ 
willingness and ability to implement certain policy adjustment measures. Third, stigma also makes it 
harder for the Fund to play a role in crisis prevention. This being said, it must be borne in mind that 
stigma is a matter of perception. Not all countries perceive discredit in being supported by the Fund; 
on the contrary, as noted in Section 2.4, national authorities may also proactively use the Fund as a 
means to contain the political costs of domestic reforms. 

Several factors can drive the perception of stigma. Stigma might be perceived by countries that 
attach considerable importance to safeguarding their sovereignty and do not want to be seen as 
having to ask others for financing or do not want to accept conditions that they feel are imposed by 
others. Harsh or even excessive conditionality has also been cited as one reason for the perception of 
stigma. During the Financial Crises of 1997-1998, many Asian countries felt strongly that they were 
victims of wrong IMF prescriptions, and policymakers also felt politically humiliated by IMF leaders 
and officials (Ito, 2012). In the case of the crisis in Greece, the economic stipulations by the lending 
institutions (including the IMF) were at times considered offensive by Greece's authorities and 
population (Box 7). The perception of stigma can also be linked to the perceived lack of 
evenhandedness in surveillance and lending. 

Over the years, the IMF has tried a number of ways to address concerns related to perceived 
stigma and lack of ownership. The proposed remedial measures included: limiting 
programme-related conditions to the strict minimum needed to achieve the programme's goals; 
eliminating structural performance criteria and reliance on review-based conditionality for structural 
reforms; increasing flexibility in programme design and monitoring (IMF, 2012, p. 15); clarifying that 
members are “primarily responsible” for the selection, design and implementation of their economic 
and financial policies; and introducing conditionality that protects the most vulnerable sections of the 
population (IMF, 2012, p. 16). Section 3.2 mentions other connected reforms. Stigma perceptions 
have also been addressed by the introduction of new precautionary lending tools requiring no or very 
limited ex post conditionality (i.e. the FCL and the PLL). 

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3 

Implementing IMF conditionality: 
institutional aspects 

As noted earlier, conditionality is not explicitly mentioned in the Fund’s Articles 
of Agreement (AOA) but is a key element of the pursuit of its objectives. The 
specific policies for the use of IMF resources have been developed over the years by 
its Executive Board, by approving formal Guidelines and Guidance Notes to the Staff. 
Periodic reviews, such as the 2018 ROC, are an essential part of the process of 
keeping conditionality aligned with those objectives. The Independent Evaluation 
Office (IEO 2007 and 2018) has also contributed to shaping the institutional view of 
conditionality through several reports. 

3.1 

The main elements of the conditionality process at the IMF 

The implementation of IMF conditionality is best described as a process that 
unfolds over time. It includes policies and procedures designed to link the sequence 
of disbursements of Fund money to demonstrable policy actions by the borrowing 
members, while adjusting for changes in the latter’s economic and financial 
conditions. This process takes account, on the one hand, of a number of predefined 
categories of domestic policy commitments which must be fulfilled and, on the other 
hand, of a series of formal Board deliberations on activating a programme and 
approving the subsequent reviews, including on granting certain “waivers” for 
non-observance of those commitments (i.e. exemptions from implementing some of 
the agreed policy measures). 

Domestic policy commitments in Fund-supported programmes may take 
different forms: 

Prior actions – When deciding whether or not to approve an arrangement, complete 
a review or grant a waiver for non-observance of a performance criterion, the Fund 
often requires that the member first take certain measures as a prior condition to the 
Board’s decision. These prior actions are generally structural measures whose 
implementation is so important that the IMF is not prepared to release any further 
funds until they are taken. Prior actions are relied upon particularly where the 
member’s track record of performance has not been good and the Fund doubts the 
member’s commitment to its programme. 

Performance criteria – These include quantitative performance criteria, consisting of 
quantitative targets for key macroeconomic variables that are expected to be reached 
over the life of the member’s programme.13  Until 2009, there were also structural 
performance criteria, including structural measures whose implementation was 

13    Common examples are the level of net international reserves or the size of the budget deficit. 

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regarded as crucial to the success of the programme. 14  In order to draw from the 
Fund, IMF members with a programme must demonstrate that the relevant 
performance criteria have been met and, on this basis, that the programme is “on 
track”.15 

Indicative targets – Variables may be established as indicative targets for the part of 
an arrangement for which they cannot be established as performance criteria 
because of substantial uncertainty about economic trends. As uncertainty is reduced, 
these targets will normally be established as performance criteria, with appropriate 
modifications as necessary. Indicative targets may also be established in addition to 
performance criteria as quantitative indicators to assess the member’s progress in 
meeting the objectives of a programme in the context of a programme review. 

Structural benchmarks – A measure may be established as a structural benchmark 
where it cannot be specified in terms that may be objectively monitored. Structural 
benchmarks are intended to serve as clear markers in the assessment of progress in 
the implementation of critical structural reforms in the context of a programme review. 
Failure to implement these benchmarks, however, does not automatically lead to the 
interruption of disbursements under an arrangement should no waiver be granted. 

Programme reviews by the Executive Board are a key defining moment in Fund 
conditionality. The borrowing member will not be able to receive further 
disbursements until the review is completed, which means that the Board is satisfied 
that the member’s programme is on track. In reaching this assessment, the Board will 
review both past performance and potential implementation going forward. Board 
reviews give the Fund an important opportunity to establish conditions for drawing 
funds in future if they were not established when the arrangement was approved. 
They also allow the Fund to modify the arrangement over time as the programme is 
implemented. 

3.2 

The Guidelines on Fund conditionality: key principles and 
conditionality reviews 

The current pillars of Fund conditionality were shaped by Guidelines approved 
by the Board in 2002 (IMF, 2002). For a brief discussion on how these Guidelines 
have evolved since the Fund’s inception, see Box 3 at the end of this section. See 
Box 4 for a comparison between the IMF’s general framework for conditionality and 
programme design, and the rules and processes related to the use of ESM 
resources. 

14    These latter conditions often involve legislative reforms such as the enactment of a new banking or 

bankruptcy law. 

15    The Executive Board may grant a waiver for non-observance of some conditions and permit the 

disbursements to be made only if it is satisfied that, notwithstanding this non-observance, the programme 
can still be successfully implemented. In practice, the waiver will normally be granted if (i) the 
non-observance is minor and essentially self-correcting, or (ii) in cases where the non-observance is 
more serious, the member is prepared to take additional corrective measures to bring the programme 
back on track. 

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The 2002 Guidelines contain five general principles on conditionality, 
supplemented by operational instructions to staff. These principles are the 
following: 

Ownership – In responding to members’ requests to use Fund resources and in 
setting programme-related conditions, the Fund is guided by the principle that “the 
member has primary responsibility for the selection, design, and implementation of its 
economic and financial policies”. The IMF defines national ownership as “a willing 
assumption of responsibility for a program of policies, by country officials who have 
the responsibility to formulate and carry out those policies, based on an 
understanding that the program is achievable and is in the country’s best interest” 
(IMF, 2002, p. 8). Thus, this principle postulates both the authorities’ willingness and 
ability to “do the right things”, i.e. to implement the policies agreed with the IMF. As is 
evident, the mere willingness of country officials to implement these policies will have 
no effect if, for example, a new law agreed as part of the programme cannot actually 
be passed by national or local authorities. 

Parsimony – “program-related conditions should be limited to the minimum 
necessary to achieve the goals of the program or to monitor its implementation; the 
choice of conditions should be clearly focused on those goals.” 

Tailoring – “the causes of balance of payments difficulties and the emphasis to be 
given to various program goals may differ among members. In addition, economic 
policy understandings should be consistent with the member’s capacity to implement 
policies… the specification and timing of policy adjustments and the appropriate mix 
of financing and adjustment will reflect the member’s circumstances and the 
provisions of the facility under which the Fund’s financing is being provided.” 

Coordination with other multilateral institutions – “the Fund’s policy advice, work 
on program design, and conditionality should strive to be consistent with that of other 
institutions and, whenever possible, should be integrated within a coherent 
country-led framework. Responsibility and accountability for all conditions attached to 
the use of Fund resources reside with the Fund.” 

Clarity – “program-related conditions should be transparently distinguished from 
other elements of the authorities’ program both in staff reports and in the member’s 
program documents. In particular, although program documents, if the authorities so 
wish, may set out the authorities’ broad policy agenda for national or international 
audiences, such documents as well as staff reports should clearly specify the parts of 
the agenda that constitute understandings on which continued access to Fund 
resources depends.” 

The first three principles are particularly relevant and tend to reinforce one 
another. Ownership is arguably the key ingredient in the effective implementation of 
the required policy adjustment, which in turn may pave the way towards achieving the 
ultimate objectives of Fund-supported programmes (i.e. solving b.o.p. problems and 
putting members in a viable external position in the medium term, without resorting to 

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measures destructive of national or international prosperity).16  Parsimony and 
tailoring are also fundamental principles of Fund conditionality, as they help underpin 
country ownership. 17 

These principles have remained unchallenged since 2002. Based on them, IMF 
programmes have been expected to give members adequate policy space and be 
composed of conditions judged to be of critical importance or necessary for the 
implementation of specific provisions of the Articles or policies adopted under them. 

Since 2002, several reviews and reports have assessed and monitored the 
most important aspects of conditionality. Following the recommendations by the 
IEO (2007), structural performance criteria were abolished in 2009 and replaced by 
review-based assessments of progress in the implementation of structural conditions, 
in order to enhance the flexibility of the conditionality framework and to reduce the 
stigma associated with them. The 2011 Review of Conditionality concluded that 
conditionality was sufficiently flexible and programmes had been properly adapted to 
changing domestic conditions. However, programme ownership and macroeconomic 
outcomes were considered to be major pending issues (and will also be at the heart 
of the current review). Serious emerging challenges were identified in connection with 
the euro area crisis (the size of debt burdens, the systemic nature of crisis and the 
cooperation with other institutions in a currency union). Macro-social issues started 
attracting increased attention as well. In its updated report on structural conditionality, 
covering the 2003-17, the IEO (2018) considered the materialisation of some 
streamlining to be an effective achievement but stressed the need to continue 
addressing the perception of stigma and lack of ownership. For instance, it found 
limited evidence that eliminating structural performance criteria had served this 
objective. 

Over the years, national ownership of programme conditionality has become 
critical in the relationship between the Fund and its borrowers. Conditionality 
was initially designed and implemented as a request from the Fund in return for 
financial assistance in order to safeguard IMF resources. This narrowly contractual 
approach evolved in the 1990s-2000s when the lack of empowerment of national 
authorities was identified as a major reason for programme failure. Since the 2002 
Guidelines, the relationship has relied on greater ownership; it has focused on 
arriving at mutually agreed conditions through policy dialogue, ideally led by the 
member. However, this gives rise to some challenges as ownership is dynamic and 
not directly observable, and it relates to many potential owners (Boughton and 
Mourmouras, 2002). What is at stake then, is how to build a relationship of trust with 
authorities, and how to overcome obstacles to achievability such as weak 
administrative capacity. The recent experience of the Greek programme 

16    The members’ “primary responsibility” over their own policies does not mean that they should be solely 
responsible for the design and implementation of programme conditionality. In fact, the IMF has a legal 
obligation to ensure that these policies and the related programmes comply with its ultimate goals as 
dictated by the Articles. For this reason, conditionality is always negotiated bilaterally with the authorities 
and represents a mutually acceptable understanding of programme goals, the political economy 
framework, the country’s economic and financial priorities and its capacity to implement reforms within 
the specified time horizon (IMF, 2012b, p. 31). Thus, the IMF remains fully responsible for establishing 
and monitoring all policy conditions.   

17    For a further discussion on measurement issues related to country ownership, see Box 5 in Section 4.2. 

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demonstrated the persistent difficulties in ensuring broader and effective national 
ownership irrespective of the borrowing country’s level of development. 

3.3 

Main issues for the 2018 Review of Conditionality 

The preliminary findings of the 2018 ROC were discussed by the Executive 
Board in July 2018 and February 2019. Those early discussions provided a preview 
of the main issues considered in that exercise, particularly: (a) assessing the 
effectiveness of Fund-supported programmes and measuring their success; 
(b) analysing the growth and debt outcomes in programme countries, which were 
found to be generally disappointing compared with staff projections despite a high 
degree of programme implementation. In the staff’s view, this underperformance 
could be attributed not only to domestic factors but also to the unfavourable external 
environment in the aftermath of the global financial crisis. In this context, several 
aspects needed to be reviewed: the quality of fiscal adjustment, the nature of 
structural conditionality (which could be excessively tilted towards areas where the 
Fund has greater expertise) and the length of the Fund’s programmes (which could 
be too short given the increasingly structural nature of conditionality). The Fund also 
planned to gauge evenhandedness in designing programmes and the impact of 
sovereign debt operations for programme countries. 

From an EU perspective, the IRC Task Force considered that consistency with 
the recently approved decision on programme design in currency unions was 
one of the aspects to monitor in the context of the Fund’s Review of 
Conditionality, even though this issue would not be prominent in the review. 
Other issues were related to the need to ensure well-designed conditionality that 
takes due account of the need for structural reform, which is especially important for 
countries in the Economic and Monetary Union. Ownership could be better served by 
promoting social acceptance of the programmes through an appropriate 
communication strategy and measures to ensure fair distribution of the adjustment 
costs, rather than by a mere reduction in the number of conditions. The prioritisation 
and sequencing of the measures, taking into account the complementarity of reforms, 
is especially important for ensuring success, which may come about more slowly than 
with more traditional fiscal measures. In fact, IMF conditionality seems to be too 
focused on fiscal issues. Successor programmes might be needed if the initial 
programmes have failed to reduce countries’ imbalances, but consideration must be 
given to how these would interact with politics and ownership in the country and 
comply with IMF policies. 

The ROC’s focus on the success of IMF programmes was regarded as 
essential. Appropriate IMF conditionality is particularly important for ensuring the 
success of IMF programmes in terms of temporary use of Fund resources and timely 
repayments to the Fund. Lack of success of IMF programmes could compromise the 
necessary reserve asset characteristics of central bank claims vis-à-vis the IMF, 

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which is also particularly relevant for central banks in the European System of Central 
Banks (ESCB).18 

All such themes are considered in the remaining parts of this report, in the light 
of the findings of the empirical literature (Section 4.1) and the preliminary indications 
provided by our own additional investigations (Section 4.2), which aim to set the 
backdrop for the discussions on the 2018 ROC. 

Box 3 
The development of IMF conditionality: a historical overview 

The original Articles of Agreement (AOA) contained no explicit statement that the Fund had to 
adopt policies on the use of its resources (Gold, 1979). In the very early years of the Fund, some 
controversies arose about the “automaticity” of its resources, i.e. the Fund’s ability to challenge the 
requests of its members. The UK and virtually all other countries did not want to place limitations on a 
member's right to draw, while the US – in fact the only potential creditor at that time – wanted to 
protect IMF resources from misuse. The UK in particular, which according to Oliver (1985) regarded 
national economic sovereignty as an absolute priority, wished to place strict limitations on the Fund’s 
responsibilities vis-à-vis the economic policies of its members (Dell, 1981). In 1947, the first 
Managing Director further clarified the limitations on the purposes for which the resources may be 
used in a letter and a memorandum to members (Gutt, 1947). 

In 1952, a major step to formulate policies on the use of Fund resources was taken. The IMF 
established the credit tranche policy and introduced Stand-By Arrangements (SBAs). Access to Fund 
resources was ensured insofar as “members had made a demonstrable contribution to the Fund’s 
activities”, essentially distinguishing the automatic use of the “gold tranche” (25% of a member’s 
quota that was fully paid in gold; the current “first credit tranche” since the second amendment of the 
AOA in 1978;) from what later became known as the “upper credit tranches” (any use of IMF credit 
above 25% of quota). With the establishment of the SBA, which enabled the Fund to decide on each 
occasion whether it would make its resources available in support of a member’s economic and 
financial programme, policies on the use of Fund resources became policies of the Fund by which the 
standards of the credit tranche policy were applied (Gold, 1979). In 1955, the general principle 
became that “the larger the drawing in relation to a member's quota, the stronger the justification 
required of the member" (Horsefield, 1969, Vol. 2, p. 404). 

The Fund’s first conditionality guidelines in 1968 were already a compromise between 
even-handedness and flexibility. At that time, the Board stressed the need to allow for flexible yet 
uniform treatment of all members (Guitián, 1981) and adopted a first set of rules on conditionality after 
the particular case of the United Kingdom’s exceptional SBA, lacking any quantitative performance 
clause, fuelled the debate on evenhandedness in preceding years. In addition, the AOA were 
amended for the first time in 1969, authorising the establishment of special drawing rights (SDRs) and 
formalising the Fund’s policies on the use of its resources. 

18    Council Regulation (EC) No 3603/93 relating to the application of the monetary financing prohibition 
(Article 123 AEUV) allows ESCB central banks to finance obligations falling upon the public sector 
vis-a-vis the IMF on behalf of their home countries (Article 7), on the assumption that this financing 
“results in foreign claims which have all the characteristics of reserve assets” (preamble, paragraph 14). 
According to IMF definitions of reserve assets (Balance of Payments Manual, Sixth Edition, Chapter 6, 
Section F.I.a,e), this implies that such claims need to be “readily available”, i.e. highly liquid and of low 
risk. 

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Guidelines were extended and adapted in 1979 to emphasise flexibility as a result of strong 
criticism from developing countries that conditions had been insensitive to the political and 
social context of borrowing states. Conditionality started by focusing on fiscal and monetary 
conditions. The rapidly changing economic and political context of the 1970s – with the collapse of 
the fixed exchange rate system and a major oil crisis – led the IMF to expand the scope of its 
conditionality, including conditions on exchange rate policy, levels of external debt and trade 
liberalisation, using alternative bases which were not provided for in the Guidelines such as Letters of 
Intent (LOI) and compulsory preconditions on fiscal aspects (Best, 2012). These changes 
accompanied the creation of the Extended Fund Facility (EFF) in 1974 which was supposed to 
provide longer-term assistance than the SBA to support structural reforms (see below) needed to 
address b.o.p. difficulties. 

The biggest transformation came in the 1980s with the development of “structural 
conditionality”. As described by Babb and Buira (2005), lending arrangements began to require 
“structural” reforms that were no longer temporary, but oriented towards deep changes that were 
much more difficult to reverse, such as privatisation and trade liberalisation. In parallel, the 
Guidelines’ ambiguity about the number of performance criteria enabled them to proliferate, and the 
limited scope of these criteria (macroeconomic variables) led Fund staff to rely increasingly on 
reviews and prior actions to cover other economic policy areas. 

In 2000, a refocused set of interim guidelines was approved. When the Fund was blamed for 
precipitating the Asian financial crisis, the management introduced a clear inflexion in the guidelines' 
implementation and launched a review which intended to streamline conditionality and concentrate 
on the Fund’s core work areas. These initiatives led to the approval of the current 2002 Guidelines. 

Box 4 
Conditionality and programme design for using IMF and ESM resources: a comparison 

This box aims to briefly illustrate the rules and processes related to the use of ESM 
resources, in parallel with the features of the IMF’s framework, on the basis of the current 
ESM Treaty. 19  In this respect, it should be noted that, at the December 2018 Euro Summit, leaders 
agreed to enhance the role of the ESM and mandated the Eurogroup to prepare amendments to the 
ESM Treaty by June 2019. The primary focus of this box will be on those facilities of the ESM that are 
actually comparable to those of the Fund (in particular the ESM Loan facility and the precautionary 
facilities).20 

There is no exact equivalent in the ESM Treaty of the two key purposes of the Fund's lending activity 
(b.o.p. assistance and resource safeguard) (ESM, 2012a). 

19    The European Stability Mechanism (ESM) was set up in October 2012 as a successor to the European 
Financial Stability Facility (EFSF). The EU provides additional forms of financial assistance that will not 
be examined here: these include Balance of Payments Assistance (BOP) reserved for EU countries 
which have not adopted the euro and Macro-financial Assistance (MFA) for non-EU countries that are 
part of the European Neighborhood Policy. 

20    The design of EFSF/ESM-supported programmes and the related conditionality are legally governed by 
the ESM Treaty (ESM, 2012a). The latter includes, in particular: paragraphs 6, 8, 13 and 14 of the 
“Preamble”, Article 3(Purpose), Chapter 4 (Operations) and related Articles 12 to 21, plus 
Article 32(Legal status, privileges and immunities). The former are complemented by specific Guidelines, 
including those on Loans and Precautionary Financial Assistance (ESM, 2012b and 2012c), and by other 
legal documents on the ESM’s lending activities (ESM, 2012d, 2012e, 2012f and 2014). The European 
Commission and the ESM also took stock of their collaboration in past euro area programmes (ESM, 
2018a) and outlined their future collaboration on programme design in a joint position statement (ESM, 
2018b) which was officially endorsed at the Euro Summit meeting of 14 December 2018. 

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First, the ESM is explicitly tasked with mobilising funding and providing stability support to 
ESM members which are experiencing, or are threatened by, severe financing problems, if 
this is required to safeguard the financial stability of the euro area as a whole and of its 
Member States. There is no specific reference to members' b.o.p. financing needs, which are 
crucially important to motivate Fund programmes (Article 3). Therefore, it could be argued that the 
ESM’s mandate is broader than that of the IMF because financial instability may have 
b.o.p. implications in the euro area but not necessarily in all cases. The focus on financial stability is 
justified by (i) the strong economic and financial links between euro area countries; (ii) the related 
broader scope for euro area lending, as demonstrated by the legal possibility of using ESM financing 
to re-capitalise the financial institutions of a euro area member (Article 15)21  and to purchase 
sovereign bonds in the primary and secondary markets (Articles 17 and 18)22; (iii) as well as by the 
decision to remove the direct recapitalisation instrument (DRI) from the ESM toolkit, with the ESM 
assuming the role of backstop to the Single Resolution Fund – a role which has no parallel in the IMF 
setup. 

Second, the European framework lacks detailed and formalised policies for resource 
protection comparable to those of the Fund – for instance, the IMF’s financing assurances 
and exceptional access policy (Section 2.1). The safeguard issue is addressed partly by the 
ESM’s obligation to lend under strict conditionality, the establishment of a warning system to ensure 
timely repayment of ESM financial assistance (Article 13(6)), the ESM’s preferred creditor status 
(“Heads of State or Government have stated that the ESM loans will enjoy preferred creditor status in 
a similar fashion to those of the IMF, while accepting preferred creditor status of the IMF over the 
ESM”: ESM Treaty, Preamble, para. 13) and by its immunities and privileges. 

Except for the future Precautionary Conditioned Credit Line (PCCL), ESM loans are always 
tied to conditionality. Article 3 stipulates that “the purpose of the ESM shall be to mobilise 
funding and provide stability support under strict conditionality”. Generally, the design and 
management of ESM-supported arrangements can be summarised as follows. According to the 
current ESM Treaty, conditionality is first negotiated by the European Commission (EC), in liaison with 
the ECB, and “wherever possible” with the IMF; conditionality is then specified in a written 
memorandum of understanding (MOU) with the borrowing country, which is signed by the EC on 
behalf of the ESM. In this respect, the December 2018 Euro Summit agreed that going forward the 
European Commission, in liaison with the ECB and the ESM, will collaborate on the design and 
negotiation of policy conditionality as well as on the preparation of Debt Sustainability Analyses. In all 
these activities, the ESM will contribute from its perspective as lender. The ESM will also co-sign the 
MOU with the Commission. At the June and December 2018 Euro Summits, leaders agreed that 
conditionality for accessing the ESM PCCL would be replaced with a commitment from the 
beneficiary Member State to continuous compliance with more effective ex ante eligibility criteria. 
They also agreed that countries requesting a PCCL would not be required to sign a MOU detailing ex 
post conditionality. 

The decision whether to grant financial assistance based on the commitments specified in 
the MOU lies with the ESM Board of Governors, and must be taken by mutual agreement 
(i.e. unanimity). The arrangement is formally completed by a second legal document, the Financial 
Assistance Facility Agreement (FFA), which stipulates the relevant financial terms and conditions, as 

21    The provision of ESM financial assistance for the recapitalisation of financial institutions has already 

been used in the case of Spain. 

22    Sovereign bond purchases by the ESM have never been activated. 

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well as the choice of facility (Article 13 of the ESM Treaty). If the country deviates significantly from 
the programme, disbursements may be withheld. 

This process displays a number of similarities with what happens at the IMF. However, there are some 
important differences: 

First, in the ESM’s case, both the duration of the arrangement and the length of the repayment 
period are left unspecified ex ante for the ESM Loan facility (Cheng, 2018). In practice, these 
two key parameters of programme design are typically agreed by the ESM’s Board of Governors on a 
case-by-case basis, and included in the relevant FFA. The wider room for flexibility available to the 
euro area authorities has in fact made it possible to arrange programmes with a longer duration, 
designed to address situations requiring policy adjustments with an eminently structural component, 
that could only be implemented in a longer-term perspective (as a matter of fact, the number of 
conditions per ESM-supported programme has tended to be greater than the IMF’s). 

Second, as noted by Tumpel-Gugerell (2017), in the ESM context, the criteria for compliance 
monitoring and reporting are less formalised than in the IMF context. The ESM has certainly 
drawn from the IMF’s practice of prior actions (also called “milestones”) for certain key measures 
which must be implemented before concluding a review and making a disbursement. However, the 
criteria for approving possible waivers and the related counterbalancing remedial measures remain 
unspecified. In practice, however, this has not prevented the ESM from implementing its conditionality 
in a manner that could ultimately be very close to the Fund’s. 

Overall, the provisions described above suggest that the ESM framework is less structured 
than the Fund's. Nonetheless, this state of affairs did not pose fundamental hurdles to managing 
crises in the euro area, partly in cooperation with the Fund (for a review of these experiences, see 
Tumpel-Gugerell, 2017). The lack of this precise framework may reflect: 

• 

• 

the desire to retain some operational flexibility for managing crises in the euro area; 

the unique features of economic governance settings in Europe, in which crisis management 
procedures are combined with a much more developed framework for crisis prevention (all euro 
area countries are subject to intense policy scrutiny even in the absence of ESM support, 
different from what happens in the IMF’s case). 

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4 

The empirical evidence 

The empirical analysis of IMF programmes is hampered by measurement 
difficulties and the lack of adequate granular data. A proper assessment of how 
conditionality and programme design contribute to the effectiveness of Fund lending 
would require the ability to answer central questions such as: Is conditionality 
appropriate and effective for addressing countries’ problems? Are conditions 
complied with? Do programmes achieve their policy targets? Unfortunately, empirical 
analyses in this field are fraught with substantial hurdles, the most important ones 
being related to the measurement of key concepts such as the “depth” or ambition of 
conditionality, country ownership (Box 5) and programme success (Box 6). The brief 
overview of the empirical literature presented in Section 4.1 illustrates the difficulty in 
reaching clear-cut conclusions on the effectiveness of IMF programmes. The data 
needed to answer more specific questions – such as appropriately granular details on 
the composition of the required fiscal adjustment or on the content of structural 
conditions – are not readily available. 

With these problems in mind, the facts reported in Section 4.2 aim to provide 
preliminary indications that could usefully contribute to framing the 
discussions on the 2018 ROC. In particular, the analysis includes a description of 
the main features of the programmes supported by the IMF during the 2008-18 
period, with special emphasis on issues such as European programmes and those 
with exceptional access to Fund resources, and examines the changes in key 
macroeconomic variables associated with these programmes, using a “before-after 
approach”. As is evident, this exercise can only offer a preliminary description of 
economic developments in countries under an IMF programme; properly assessing 
the effectiveness of IMF programmes would require a much more sophisticated 
analysis, which is beyond the scope of this report. 

4.1 

A non-technical review of the empirical literature 

The effectiveness of IMF programmes is typically gauged in terms of their 
macroeconomic outcomes, using a variety of methods. The main variables 
considered in the literature include GDP growth, inflation, selected b.o.p. and 
international investment position magnitudes, financial asset prices and indicators of 
public finances and income distribution.23 

One important difficulty that arises when assessing the success of IMF 
programmes is potential selection bias, due to the fact that the borrowing 
countries’ starting point is generally a difficult economic situation 
(current/financial account crises, sovereign debt crisis, or economic 

23    Reflecting the general lack of detailed information on IMF programmes, only a limited number of 

academic studies have been able to test the effects of specific elements of Fund conditionality and 
programme design. Other studies typically resort to dummies to capture the fact of having or not having 
an IMF programme, with a greatly reduced ability to provide useful policy insights. 

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recessions). Thus, analyses that do not account for this circumstance tend to 
underestimate the success of IMF programmes. Despite a growing body of literature 
on different techniques for handling non-random selection, one caveat to bear in mind 
is that results still tend to depend crucially on the specification of the selection 
process, and hence the empirical evidence remains inconclusive.24 

Earlier studies were inconclusive as to whether and to what extent IMF 
programmes and their conditionality achieved their macroeconomic objectives. 
Most of the multi-country studies performed between 1978 and 1998, as summarised 
by Haque and Khan (1998)25, showed that programmes generally improved the 
external balances. The decline in inflation was statistically insignificant in most cases, 
as the effects of demand contraction were offset by devaluation. Growth was 
depressed during stabilisation due to demand contraction, but recovered over time 
helped by structural reforms (e.g. Conway, 1994; Bagci and Perraudin, 1997). In 
contrast, Killick (1995) found no effect on current account and neutrality on growth. 
Mussa-Savastano (1999) found that between 1977 and 1997, only 45% of 
programmes could be deemed successful, using the share of total IMF loans 
disbursed as an indicator of success. 

In the last 20 years, studies have continued to show mixed results, particularly 
on growth. Although Dicks-Mireaux et al. (2000), Atoyan and Conway (2006) and 
Fidrmuc and Kostagianni (2015) found significant positive effects on growth, other 
studies showed negative impact during or after the programme, with aftermath 
benefits undercompensating for the losses (Przeworski and Vreeland, 2000; 
Hutchison, 2001; Bird, 2001). Barro and Lee (2005) found negative effect on growth 
in the five years following the programme, with a 1% increase in IMF lending lowering 
annual growth by 0.27 pp. Dreher and Vaubel (2004) estimated lower growth by 1.5 
pp per year26  and found weak mitigation from conditionality compliance. In his 2006 
paper, Dreher attempted to separate potential growth effects arising from policy 
advice, the actual disbursements and conditionality, with ambiguous results. Finally, a 
number of papers (Joyce and Noy, 2008; Bird, 2002) have highlighted the tendency 
for programmes to go off-track and the proliferation of sequential programmes. 

Studies isolating the impact of IMF conditionality on policy targets and 
macroeconomic objectives have found negative correlation between the 
number of conditions and meeting the policy targets, while macroeconomic 
outcomes typically fell short of expectations overall. Based on a panel 
regression, the IMF (2012) conditionality review found that parsimony supports 
implementation. On a more critical note, Dreher and Vaubel (2004) found that 
conditionality does not significantly affect any of the key policy targets. Baqir et al. 

24   These considerations may explain why a variety of methods had been applied, ranging from 

non-parametric statistical techniques, e.g. the “before-after” and “with-without” approaches, to more 
sophisticated policy reaction functions that control for exogenous and initial factors, using the GEE or 
instrumental variables. In its regular ROCs, the IMF has mostly used the “actual-target” approach, which 
compares actual performance under the programme with the objectives specified in the programme. 

25    The principal and most frequently quoted studies covered include Reichman and Stillson (1978), 

Connors (1979), Killick (1984), Pastor (1987), Gylfason (1987), Goldstein and Montiel (1986), Khan 
(1990), Conway (1994), Bagci and Perraudin (1997) and Dickes-Mireaux et al (2000). 

26    This is in line with results of other studies, estimating the costs of IMF programmes in terms of foregone 

output to be in the range of 0.7-2.5 percentage points for each year of programme participation 
(Hutchison, 2004). 

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(2005) found that most programme objectives were rarely fully achieved and fiscal 
and monetary targets were ambitious. Outcomes typically missed forecasts for 
growth and inflation, even when intermediate policy targets were met, but were 
broadly in line with the current account objectives; all three objectives were met 
simultaneously in only about 10% of the programmes. The IMF, in its 2011 review of 
conditionality, found that the macroeconomic and social effects of programmes were 
generally positive. In its 2015 crisis programme review, it stated that internal 
devaluation proved difficult to achieve, with growth and export shortfalls also 
reflecting larger than expected fiscal multipliers and modest dividends from structural 
conditionality. 

Although the fiscal balance has tended to improve in most programme 
countries, the composition of the improvement has differed (Bulir and Moon, 
2003). In countries with structural conditionality, the adjustment has come primarily 
through sharp expenditure compression, while conditionality had no impact on 
revenue collection (see also Cho, 2009). In contrast, Crivelli and Gupta (2014 and 
2016) have found that conditionality impacts tax revenue positively, being more 
effective when targeted to a specific tax. Meanwhile, Gupta (2018) argues that in 
developing economies, conditionality on expenditure has a more substantive 
long-term impact, while conditionality on social spending appears ineffective in the 
medium term. Tanzi and Davoodi (1998) argued that IMF programmes induce 
governments to curb public investment, negatively affecting growth. Finally, Rickard 
and Caraway (2018) found that IMF loans with public sector conditions prompt cuts in 
the wage bill only in the short term; these effects do not persist in the long term 
because of domestic political pressure. 

The discussion on the channels affecting the fiscal balance is linked to the 
deeper question of the quality of fiscal adjustment, an issue which has long 
concerned the IMF (IEO, 2003; IMF, 2006). The question does not only refer to 
whether expenditure cuts are better than tax increases or vice versa, but extends to 
the quality of fiscal institutions and to the need to change structural aspects related 
both to fiscal revenues and expenditure. Guerson (2013), using a DSGE model for 
Hungary, finds that a reduction in current expenditure has the smallest effects on 
growth but that reducing government investment is costly, as is raising corporate 
taxes. These results are similar to those found for larger samples of countries by 
Alesina and Perotti (1996) and Alesina et al. (2015). MacKenzie et al. (1997) examine 
fiscal consolidation in eight economies and conclude that expenditure cuts in health 
and education are particularly damaging if not reversed quickly. The same applies to 
investment (see for example Carnot, 2013 and Carriere-Swallow et al., 2018). In spite 
of this evidence, Buira (2003) finds that cuts in expenditure in IMF programmes tend 
to focus on investment and social expenditure because they are usually easier to cut 
than wages and salaries. 

Revenue and expenditure structures are crucial to facilitate more efficient and 
less damaging consolidation (IMF, 2006). MacKenzie et al. (1997) find that 
countries with better public expenditure management systems and efficient tax 
administrations had much better results in terms of the sustainability of consolidation 
and that negative demand effects of consolidation were limited. However, structural 

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changes, of course, take longer to implement, which has implications for the speed of 
adjustment that is contained in programmes – faster adjustments that go for 
low-hanging fruit may be less durable. 

IMF programmes have tended to adversely affect income equality and 
distribution (Johnson and Salop, 1980; Sisson, 1986; Pastor, 1987; Garuda, 
2000). Killick (1984) showed that IMF programmes led to large declines in real 
wages, sharp rises in unemployment and increasing income concentration. Blanton et 
al. (2018) find that participation in IMF programmes causes the shadow economy to 
increase because of the programme's impact on economic hardship and the capacity 
of the state to clamp down on such activity. Hoddie and Hatzell (2014) note a 
deterioration, at least in the short to medium term, in health systems. Finally, 
Kentikelenis et al. (2016) find that policies intended to smooth the social 
consequences of the required macroeconomic adjustment are inadequately 
incorporated into programme design. 

The empirical literature is mixed on whether IMF programmes have catalytic 
effects (for a discussion on earlier contributions, see Cottarelli and Giannini, 
2002). Findings depend partly on the methodology used to deal with selection bias, 
reverse causality and omitted variables. Most papers analysing the impact of IMF 
approval in terms of net capital flows find no evidence of catalytic effects (Bird and 
Rowlands, 2008; Hajivassiliou, 1987; Rodrik, 1995). Some authors such as Jensen 
(2004) and Edwards (2006) even find a negative effect. Van der Veer and de Jong 
(2010) find that the IMF is effective in mobilising private capital flows for countries that 
do not restructure their debt. One hurdle for these studies is that the required 
adjustment in the current account balance, which is a key objective of most IMF 
programmes, by definition implies lower net capital inflows. In this regard, Gosh et al. 
(2002) look at capital account crises during the 1990s and point out that the absence 
of catalytic effects was associated with larger current account adjustments than 
originally envisaged. In order to deal with the potential bias described above, Benelli 
(2003) compared actual net private capital flows with projected values; he found that 
IMF staff tended to generate relatively optimistic projections about private capital 
inflows in order to deal with binding lending constraints, and that this resulted in a 
negative correlation between successful IMF programmes 27  and the size of IMF 
lending. From another viewpoint, Bauer et al. (2012) find that IMF programmes have 
a positive catalytic effect on FDI in democracies, and a statistically significant 
negative catalytic impact in autocracies. 

Another stream of papers have used bond spreads as a proxy to gauge 
investors’ willingness to lend to programme countries. Mody and Saravia (2003) 
looked at new debt issues and found that country fundamentals do matter in 
determining the effects of IMF programmes: for countries with a very low level of 
reserves or a very high debt-to-GDP ratio, spreads were higher with a programme 
rather than without a programme. Arabaci and Ecer (2014) found that IMF 
arrangements are associated with an improvement in borrowers' access to 
international financial markets in terms of lengthened maturity; moreover, catalytic 

27    A programme is defined as successful if the initial programme projections for net private capital flows are 

met or exceeded. 

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effects are higher in countries with no access to concessional credit, meaning those 
with better economic fundamentals. Scheubel, Tafuro and Vonessen (2018) explore 
the existence of financial market stigma by analysing the impact of IMF programme 
events on T-bill rates; they find no systematic evidence of such a relationship; 
instead, countries experiencing a rise in T-bill rates have greater likelihood of 
accessing a new Fund programme – a result that corroborates the so-called 
“revolving door hypothesis” of repeated IMF lending. 

Finally, other authors have investigated whether compliance with IMF 
conditionality affects catalytic effects. Edwards (2000) found that programme 
countries which failed to implement agreed reforms were penalised in terms of 
access to capital markets. Similarly, Kutan et al (2012) have found that if 
governments fail to implement conditions on reform, any positive catalytic effects are 
reverted and that those effects tend to be transitory and vanish after the completion of 
IMF programmes. 

4.2 

IMF-supported programmes: main features and economic 
outcomes 

4.2.1 

Overview of programme conditionality and economic outcomes, 
2008-18 

This section provides an overview of the conditionality and outcomes of 
Fund-supported28  programmes approved during the 2008-18 period (73 
programmes in total, signed by 41 countries). The analysis distinguishes across 
different time periods (including a reference to the 2002-07 pre-crisis period), 
programme types and country groups. 29  The dataset is a version of the IMF’s 
Monitoring of Fund Arrangements (MONA) database, as used in Scheubel, Tafuro 
and Vonessen (2018) and Scheubel and Stracca (2016) that includes information on 
the size, type and conditionality of all programmes approved by the IMF since 1992. 
The analysis of programme outcomes is based on a complementary dataset of 
macroeconomic variables, obtained from the World Economic Outlook, for the same 
set of programmes approved between 2008 and 2018 30, analysed through the same 
categories and groups of countries. 

Regarding conditionality, the MONA database offers information on the number 
and type of conditions, the policy areas to which they apply and whether these 
conditions are complied with or not. As described in Section 3.1, conditionality is 
currently organised around quantitative and qualitative dimensions, captured by 

28    Only GRA-supported and “blended” programmes – at least 50% of which is financed by GRA resources – 
are considered. The GRA (General Resources Account) is the source of non-concessional lending to 
countries experiencing BOP problems. Blended programmes are financed from both the GRA and the 
Poverty Reduction Growth Trust (PRGT), which provides concessional lending to low income countries.   

29    See Annex 3 for the full list of programmes and Annex 4 for the list of variables and sources. 
30    Although the Fund’s 2018 ROC refers to the 2012-17 period, this report considers a wider time horizon in 
order to be able to review a sufficiently abundant set of programmes with realised macroeconomic 
outcomes.   

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quantitative performance criteria (QPC), indicative targets (IT), prior actions (PA) and 
structural benchmarks (SBs).31  For each approved arrangement, MONA contains 
information on the number of conditions in each category, together with the policy 
areas to which these refer, as well as whether these conditions are met on time, met 
partially or with delay, unmet, delayed or waived. There are however several caveats 
to the MONA database. The main one is that there are gaps and inaccuracies in the 
reported data, in terms of both the number of conditions32  and the classification of 
these conditions in the above-mentioned categories. 33  Irrespective of the data 
caveats, it is worth stressing that the mere number of conditions does not adequately 
capture the “depth” of conditionality, i.e. the extent to which conditions are meant to 
bring about substantial and lasting changes in the structure of the economy. 34 
However, a granular measurement of this aspect of conditionality is challenging in 
large samples and is beyond the scope of this report. 

A first set of insights into the features of programme conditionality is obtained 
by looking at programmes approved at the height of the global financial crisis 
(2008-12) and comparing them with those approved in later years (2013-18), as 
well as in the pre-crisis period (2002-07). Table A.2 and Chart A.1 show that there 
are notable differences between these groups. As expected, post-2008 programmes 
dwarf in size those approved before 2008, even when exceptional access 
programmes are excluded from the sample. Moreover, the 2008-12 period is 
characterised by a substantial number of exceptional access programmes (one-third 
of the arrangements approved during that period entailed exceptional access), while 
in 2013-18, the share of these programmes declined to pre-crisis levels. On the other 
hand, there has been a large shift towards EFF programmes since 2008, and 
especially since 2013, as 58% of the programmes approved between 2013 and 2018 
were EFFs. This is likely to reflect the fact that in an increasing number of countries, 
deep structural problems were at the root of b.o.p. needs, as well as a move from 
emergency crisis lending to longer, more structurally-oriented arrangements. At the 
same time, there has been a large reduction in SBAs approved on a precautionary 
basis since 2008, reflecting the severe consequences of the global financial crisis. 

The average number of conditions per concluded review dropped in the 
immediate aftermath of the global financial crisis but increased again after 
2013. Chart A.1e shows that programmes approved between 2008 and 2012 
included on average half of the conditions present in the pre-crisis arrangements, 
even after accounting for the elimination of the SPCs after 2009. The increase in the 
average number of conditions since 2013 is consistent with the increase in the 
number of EFF arrangements and the shift from crisis-fighting to more 

31    A fifth category (structural performance criteria – SPC) was eliminated in 2009 as part of the reform of 

lending and conditionality – see Section 3.1 for details on related discussions. 

32    Takagi et al. (2014) find that, based on original programme documents, the number of structural 

conditions in the Stand-By Arrangements approved between 2008 and 2011 was greater than the 
number reported in the IMF’s MONA database.   

33  The MONA database cannot be used to track conditions that are equal in essence but are slightly 

modified to adjust for programme specificities. As part of the current ROC, the IMF is undertaking a 
review of MONA to improve its accuracy and consistency. 

34  The IMF’s own research finds that the depth of conditionality is inversely related to the number of 

conditions in a programme. See IMF (2012), “2011 Review of Conditionality. Background Paper 1: 
Content and Application of Conditionality”.   

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structurally-oriented arrangements. The focus on crisis-fighting could also be the 
reason for the temporary decrease in structural conditionality in programmes 
approved between 2008 and 2012 (as shown in Chart A.1f); conversely, in pre- and 
post-crisis programmes, structural conditions accounted for three-quarters of 
conditionality. Regarding the policy areas to which conditionality apply, Chart A.1g 
shows that across all periods conditionality is dominated by fiscal and public sector 
conditions, followed by financial sector ones. Chart A.1g also shows that there has 
been an increase in the share of fiscal conditions and a corresponding decrease in 
financial sector conditionality in programmes approved after 2013. 

Programme completion rates and compliance with conditionality vary over 
time. As Chart A.1h shows, 20% of pre-crisis programmes went off-track35, whereas 
this share increased to about one-third for programmes approved after 2008, 
probably reflecting the challenges of the global financial crisis period. In contrast, 
Chart A.1i shows that around 70% of conditions in programmes approved after 2008 
were met fully and on time, a much larger share than in pre-crisis programmes 
(although it is true that pre-2009 conditionality included SPCs which were subject to 
less flexible assessments than the current SB). Finally, Chart A.1j shows that the 
average number of PAs by review decreased substantially since 2008, although this 
number has ticked up again since 2013. The apparent tension between the growing 
number of off-track programmes since 2008 and the improved programme 
completion rates merits further investigation, which is outside the scope of this report. 
However, one aspect in this regard could be the upward bias of implementation rates 
for programmes where reviews are not completed, as programme performance is not 
reported in these cases (IMF, 2019, fn. 9). 

The outcomes of Fund programmes in our sample are assessed by examining 
the behaviour of selected economic variables before, during and after IMF 
programmes (“before-after approach”). The variables include GDP growth, the 
current account balance, gross public debt, the primary balance, foreign reserves and 
net private capital inflows.36  Pre-programme, programme and post-programme 
periods comprise complete years: the pre-programme period ranges from year t-3 to 
t-1, the programme period from t to t+2, and the post-programme period, t+3 and 
t+4.37  It is assumed that programmes affect most variables in the year that the 
programme starts (year t), but it is important to keep in mind that programmes can 
start at any time during the year and that new policy measures may take some time to 
be implemented and take effect slowly. In addition, the analysis of recent 

35    A programme is considered to be off-track when it is ended or interrupted with less than half of the 

scheduled reviews completed.   

36    Although IMF programmes are also supposed to crowd-in funding from other international financial 

institutions (IFIs) and bilateral donors, the empirical investigations conducted in this report focus on the 
response of private capital flows. These flows are driven by objectives that generally do not coincide with 
those of the official sector and may therefore provide a better basis for gauging the signalling role of Fund 
arrangements. 

37    The length of IMF programmes varies between two and four years, but assuming uniform 

pre-programme, programme and post-programme periods facilitates comparison among programmes 
and is an acceptable approximation for our sample.   

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programmes relies partly on projected outcomes. 38  On average, however, results do 
not change when projections are excluded.39 

On average, the relevant variables improved in the aftermath of programmes 
that started between 2008 and 2018 (see Charts A.2a and 2b). 40  In the run-up to 
an IMF-supported programme, the average programme country experienced a 
marked growth slowdown, a deteriorating external and fiscal position, rising inflation 
and a significant reduction in net capital inflows. Moreover, public debt rose and 
foreign reserves declined. After the approval of a Fund-supported programme, these 
trends started to reverse. In particular, the external and fiscal positions improved 
considerably, growth typically rebounded and inflation declined. Net private capital 
inflows stabilised or recovered slightly. 

At the same time, IMF staff projections for growth at programme approval 
turned out to be too optimistic in most cases (see Chart A.2a, second column). 
Projections for the public debt ratio – while quite accurate in the short term – turned 
out to be too optimistic for the post-programme period; only the improvement in the 
current account was larger than projected on average. The evolution in real GDP 
growth conditional on the size of fiscal adjustment can shed some light on the 
potential reasons for the disappointing growth outcomes. 

As can be seen from Chart A.3, growth outcomes as well as staff projection 
errors are not significantly different for programmes that entailed a relatively 
large fiscal adjustment over the programme period compared with the 
remaining programmes in the sample. For the purpose of this comparison, a 
“large” fiscal adjustment is defined as a three-year adjustment of the primary balance 
(starting at programme approval) greater than 3% of GDP.41  Further evidence of this 
aspect is provided by the fact that the growth rates associated with programmes with 
a larger share of fiscal conditions42  do not appear to differ significantly from those 
associated with the other programmes. This finding does indeed express a mere 
correlation and disregards other factors that can influence the success of Fund 
programmes, such as initial conditions. Nonetheless, it suggests that relative growth 
outcomes might not be affected by either the size of the fiscal adjustment or the 
relative weight of fiscal conditions. Analysis by the IMF suggests that the composition 
of fiscal adjustment may have weighed on growth; particularly for countries that met 

38    Most data are taken from the October 2018 database of the World Economic Outlook. Values of 
macroeconomic variables for 2018 and later are projections from the same WEO, October 2018. 

39    Given that we are only conducting a descriptive analysis, it must be borne in mind that the analysis does 
not account for unanticipated exogenous shocks, differences in initial conditions between countries or 
other factors that might have influenced the effect of IMF programmes. For instance, given the starting 
years of the sample, i.e. the peak of the crisis, one would expect an improvement in most economic 
variables thereafter, regardless of the existence of an IMF programme. 

40    Each programme is taken as a single observation, which implies that some countries exhibit more than 
one observation over the time horizon considered. The results are robust to excluding successor 
programmes, or to avoiding possible overlaps between the different periods by treating the respective 
observations as missing. 

41    According to the IMF analysis, this threshold approximates the top quartile using historical data from 

1990 to 2011 for advanced and emerging economies, with debt greater than 60% of GDP (see IMF, Debt 
Sustainability Analysis for Market-Access Countries). 

42    In order to detect these programmes, the share of fiscal conditions over the total number of conditions 

attached to any programme is calculated, and those belonging to the upper quartile of the distribution are 
selected. While the share of fiscal conditions is not necessarily correlated with the size of fiscal 
adjustment, it can be considered a proxy due to the importance that the IMF attaches to fiscal objectives. 

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fiscal targets by increasing fiscal revenues and cutting public investment, projections 
errors tend to be larger (IMF, 2019). 

4.2.2 

Programme conditionality and outcomes across programme 
categories 

To further refine the analysis of conditionality, the programmes in the database 
have been grouped across certain categories or dimensions, as shown in 
Table A.1. The main features of these programme categories and the associated 
macroeconomic outcomes are discussed in this section. 

A first category to consider is exceptional access (EXA) programmes. For the 
purpose of our analysis, they are defined as programmes whose cumulated amount 
at approval exceeds the normal lending limits sanctioned by the Fund’s “exceptional 
access framework”. 43  The emphasis on these programmes is justified by two 
considerations: first, exceptional access programmes do naturally tend to pledge the 
greatest part of available resources (a quarter of the arrangements over the 2008-18 
period entailed exceptional access and this group accounted for more than 80% of 
total IMF lending during that period); second, these programmes are likely to be 
associated with countries with more problematic imbalances and therefore with 
greater challenges for IMF conditionality and programme design. Either way, they 
deserve careful scrutiny. 

Programmes for euro area countries are an important subset of the exceptional 
access category. In the 2008-18 period, four euro area countries received financial 
assistance from the Fund (Cyprus, Greece, Portugal and Ireland). All of them – with 
the exception of Cyprus – were granted access above normal limits. Overall, they 
accounted for more than one-third of the IMF’s loans approved over the past decade. 

Another aspect to scrutinise is the difference between SBA and EFF. As noted 
earlier, the number of EFFs has increased over the years. Compared to standard 
SBAs (the workhorse of IMF crisis lending instruments), EFFs are longer, have longer 
repayment periods 44  and are typically agreed with countries facing medium-term 
b.o.p. problems that are due to structural weaknesses. SBAs can also be used as a 
precautionary instrument (though subject to the same conditionality as standard 
SBAs) for countries that do not meet the strong pre-qualification conditions required 
to access precautionary facilities such as the Flexible Credit Line (FCL) and the 
Precautionary Liquidity Line (PLL). Programmes entailing sovereign debt 
restructuring are also considered, in view of the Fund’s established thinking on these 
matters, which points to the treatment of sovereign debt as a crucial aspect of 
programme design. 

43    These limits are normally expressed as a ratio to country quotas and set on an annual and cumulated 
basis. Both limits have changed during the chosen reference period: from 100% of quota on an annual 
basis and 300% overall before 2009, to 200% annual and 600% overall from 2009 to 2016, and – 
following the IMF quota increase in 2016 – to 145% and 435%, respectively. 

44    The length of EFFs is three to four years, compared with one to two years for regular SBAs (three-year 
SBAs are also possible, although not frequent). EFFs have repayment periods of four-and-a-half to ten 
years, whereas SBAs have repayment periods of three to five years. 

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Last but not least, one further important dimension to analyse pertains to 
programme sequences – i.e., strings of programmes approved within two years 
of one another for a given country. This category, which can also be defined as 
“serial borrowing”, represents a relevant fraction of the arrangements approved in the 
last decade (44 out of 73). Importantly, the successor programmes within a certain 
sequence may in certain cases signal the inability to solve b.o.p. problems within the 
specific timeframe of a single arrangement, and therefore the potential failure to attain 
one of the key statutory objectives of IMF lending. In this sense, successor 
programmes are an obvious testing ground for assessing the effectiveness of Fund 
programmes. For all these reasons, it is important to inspect more closely the 
features and outcomes of these arrangements, as well as the links between the 
programmes within a certain sequence. These matters are discussed in 
Section 4.2.3. 

The analysis of conditionality across these programme categories between 
2008 and 2018 shows that differences seem to be largely consistent with the 
distinctive features and purposes of the various programme types, as well as 
the specific financing needs and circumstances of countries requesting them (see 
Tables A.3 and 4, and tables and charts in Annex 2). 

Exceptional access programmes entail more conditions than normal access 
ones, rely to a larger extent on prior actions, have lower levels of compliance 
and are more likely to go off-track; in terms of outcomes, the improvement in 
economic variables seems to take longer. Exceptional access programmes also 
feature a higher share of financial sector conditions, likely suggesting a more severe 
crisis involving both the sovereign and the financial sector. Chart A.4 shows that, on 
average, countries with exceptional access programmes experienced a deeper slump 
in growth and a surge in public debt ratio, while these levelled off in the other 
countries; the deterioration in the fiscal position was reflected in a higher deficit which 
was reabsorbed only after the completion of the programme. The external adjustment 
proved somewhat stronger and was associated with a dramatic drop in private capital 
inflows. The recovery observed after the completion of EXA programmes suggests 
that countries regained market access, consistent with the expectation under the 
exceptional access policy. Assessing whether the weaker economic performance 
reflects a too benign assumption on the size of the economic adjustment needed 
during the programme requires further analysis; interestingly, the actual growth rates 
in the first two years of the programmes (i.e. t and t+1) were much lower than IMF 
staff projections. 

Programmes with euro area countries45  are generally associated with a larger 
share of financial sector conditions as well as with more structural conditions 
related to labour markets and competition than other programmes. In terms of 
outcomes, euro area countries underwent a protracted recession followed by a slow 
recovery, and the deterioration of fiscal and external positions required a large 
adjustment. In particular, financial sector conditions accounted for almost one-third of 

45    Results are very similar when comparing programmes in “advanced” countries with those in emerging 
market ones, given the fact that the group of advanced economies consists of the four euro area 
countries and Iceland. 

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conditionality in euro area programmes, reflecting the nature of crises experienced by 
these countries. Two other areas with a relatively larger share of euro area 
conditionality are labour market reforms and “other” structural measures (most 
prominently competition and product market reforms). Other dimensions – relatively 
high off-track probability and relatively low “strict compliance” rates (i.e. the extent to 
which conditions are met fully and on time) – could be explained by a more severe 
impact of the crisis, more complex conditionality (due to the structure of these 
economies) or a lack of ownership; these characteristics, however, change when the 
two Greek programmes are excluded from the sample. Turning to outcomes, the 
comparison (see Chart A.5) reveals a qualitatively similar pattern to the one found in 
other arrangements under exceptional access relative to normal programmes: a 
protracted recession followed by a slow recovery; a strong deterioration in fiscal and 
external positions requiring a large adjustment; and net private capital flows turning 
negative and recovering gradually. As said, with the exception of Cyprus, all euro 
area economies in our sample were exceptional access cases.46 

The comparison between SBAs and EFFs shows that the latter arrangements 
have a larger number of conditions and rely more heavily on structural 
benchmarks; countries under EFF programmes feature lower growth before the 
programme, suggesting a lack of competitiveness and larger structural growth 
impediments. On the other hand, SBAs seem to contain more conditionality applied 
to national central banks. SBAs are more likely than EFFs to go off-track; at the same 
time, they entail fewer prior actions. As they are shorter, they are most likely to be 
used for “standard” b.o.p. problems and contain less structural conditionality. In terms 
of outcomes, countries entering EFF programmes feature lower growth and a higher 
level of public debt compared with countries entering an SBA (see Chart A.6). 
However, the differences in terms of growth between these types of programmes 
tend to disappear over time. 

Precautionary SBAs have a lower number of conditions than standard ones 
and rely to a larger extent on quantitative indicators and indicative targets 
rather than structural benchmarks. Precautionary SBAs also have on average the 
smallest number of PAs among all programme categories. They have better 
compliance rates and especially “strict” compliance rates, although a large share of 
these SBAs does not get past the first two reviews, probably due to their 
precautionary purpose. In terms of outcomes, countries with precautionary 
programmes exhibited on average more stable growth rates, lower public debt levels 
and smaller fiscal adjustment. These results are consistent with the scope of this kind 
of programme, which aims to give the IMF's seal of approval to countries that typically 
do not need to draw from the IMF to face an imminent crisis, but want to retain the 
option to do so should they need it. 

Programmes involving sovereign debt restructuring feature more conditions 
and a higher share of fiscal-related ones. Preliminary evidence47  suggests that 

46    Including the Iceland programme in the euro area sample is equivalent to comparing programmes of 
advanced economies in our sample with emerging markets. The results are basically the same as in 
Chart A.1d. 

47    Only debt restructuring operations taking place during the implementation of IMF programmes are 

considered in this report. With regard to the date of debt restructuring operations, the sources employed 
are Trebesch (2014) and Bank of Canada (2017). 

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IMF programmes in combination with debt restructuring could have helped countries 
to improve their fiscal position and restore growth. These programmes have more 
prior actions, with compliance rates broadly similar to the rest of the arrangements, 
but show a somewhat worse performance in terms of programme completion rates. In 
terms of outcomes, as shown in Chart A.7, these countries entered their programmes 
with significantly higher levels of public debt, but on average, in the period under 
inspection, the debt burden was reduced and primary surpluses sustained, even after 
the programme expired. Private capital flows tended to contract significantly during 
the programme but then recovered. At the same time, economic growth turned out 
higher after the programme compared with the pre-programme period. However, 
these results are based on descriptive analysis, and it remains to be studied under 
what conditions debt restructuring constitutes a critical factor in the success of IMF 
programmes. 

4.2.3 

Serial borrowing and the success of IMF programmes 

Serial borrowing (i.e., sequences of IMF programmes for the same countries 
over a relatively short period of time) seems to be the rule rather than the 
exception in Fund lending. Overall, of our sample of GRA-funded arrangements, 
around 40% were “single” – i.e., not followed by any programmes in the subsequent 
two years. The remaining arrangements had one or more successors (i.e., were part 
of a sequence of programmes) and involved almost half of the borrowing countries in 
the sample. 

As noted earlier, successor arrangements are a convenient testing ground for 
gauging the success of Fund lending, as they may signal the persistence of 
b.o.p. problems that single programmes were unable to eradicate. Overall, over 
40% of the successor arrangements in our sample (accounting for a sizeable part of 
GRA resources committed in the 2008-18 period) were either ended or interrupted 
before completing less than half of their scheduled reviews. Their greater likelihood of 
going off-track poses further challenges to the IMF, since off-track arrangements are 
on average associated with lower growth rates and smaller capital inflows compared 
with the others (see Chart A.8), in line with the literature (Section 4.1). 

In order to deepen the analysis further, the “successor” programmes within a 
certain sequence are classified according to their financial size and drawing 
features, as defined by the Fund in a recent technical note on the measurement of 
programme success (IMF, 2019) – see Box 6 for a brief description of the proposed 
measure. In particular, a distinction is made between: 

• 

successor programmes associated with persistently “problematic” 
b.o.p. situations, in other words, following the IMF definition, those programmes 
that have a drawing (non-precautionary) nature and whose annualised amount 
(their size divided by the number of years) is larger than one-quarter of the 
applicable annual access limit envisaged by the prevailing exceptional access 
policy. For simplicity’s sake, and without implying any normative judgement, 
these programmes are defined as “bad successors” in this report. 

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• 

by implication, the remaining successor programmes would be “good”, 
being either purely precautionary or of a relatively small financial size. 
Overall, in the sample there are 27 successor programmes, of which 14 can be 
defined as “bad” and 13 as “good”. 

These categories of programmes (“single”, “programmes followed by a 
successor” and “bad” or “good” successors) are combined and compared to 
check whether there are systematic differences in the associated conditionality 
features and macroeconomic outcomes (see Tables A.3 and 4). 

Comparing “single” programmes with programmes followed by a successor. 
The focus here is on whether there are systematic differences in terms of features 
and outcomes between “single” programmes and programmes that need to be 
complemented by an additional one, either of a “good” or a “bad” type. The main 
findings are: 

Programmes followed by a “bad” successor have a larger number of 
conditions and rely to a much larger extent on prior actions than the other two 
categories. Interestingly, arrangements followed by “good” successors and those 
“good successors” themselves have a lower number and relative weight of PAs than 
“single” programmes. In turn, the latter rely to a greater extent on structural 
benchmarks; they stand out as having to meet a low share of QPCs as well. 

In terms of policy areas, single programmes have a lower share of fiscal 
conditions and a larger share of financial sector conditions (all euro area 
countries minus Greece are in this group, but they account for just 14% of “single” 
programmes). 

Compliance rates are better in “single” programmes and in ones followed by 
“good” successors – indeed, programmes followed by “bad” successors have twice 
as many “unmet” conditions as the other two groups. 

As expected, “single” programmes have the highest completion rates, while 
arrangements followed by “bad” successors are the most likely to go off-track 
(both early and mid-way). An interesting finding is that single programmes, initial 
programmes followed by “good” successors and those successors either complete 
most reviews or are terminated quickly (after no more than two reviews), while a high 
share of programmes followed by “bad” successors go off-track mid-way. 

In the case of programmes followed by a “bad” successor, we observe a slump 
in economic growth and a strong decrease in net private capital flows. The 
associated debt levels increase, suggesting larger fiscal imbalances in comparison 
with programmes followed by “good” successors (see Chart A.9). These results 
confirm the fact that IMF programmes followed by “bad” successors were not 
effective in addressing both b.o.p. and structural problems (see also Box 8 on 
Pakistan). 

Comparing “bad” and “good” successor programmes. This comparison shows 
the differences between the successor programmes that are needed to address the 
b.o.p. problems left unsolved by the former arrangement (“bad successors”) and the 

ECB Occasional Paper Series No 235 / October 2019 

36 

 
 
successor programmes that are just needed to consolidate the good results achieved 
by the former arrangement (“good successors”). The main findings are: 

“Bad successors” have a substantially larger number of conditions (indeed, 
they have the largest average number of conditions by review across all of our 
categories). These arrangements also rely to a large extent on prior actions – the 
share of PAs in total conditions and the average number of PAs by review are, 
respectively, two and five times larger than in the case of “good” successors. 
Conversely, “good successors” rely to a larger extent on QPC and ITs. 

“Bad successors” have slightly lower rates of compliance with conditionality – 
especially “strict” compliance, but otherwise similar programme completion rates to 
the “good successors”. 

Regarding the associated economic developments, a recovery of economic 
growth is observed in both groups but stronger in the case of “good” 
successors. This suggests that, in the case of countries with “bad” successor 
arrangements, structural problems had not been fully addressed. Nevertheless, these 
countries succeeded in generating fiscal surpluses and in stabilising public debt 
levels (see Chart A.10). 

On the whole, this preliminary analysis of serial borrowing sheds some light on 
the circumstances affecting the ultimate success of IMF arrangements. In 
particular, the programmes followed by successor arrangements associated with 
persisting b.o.p. imbalances perform rather poorly compared with the remaining ones 
over a variety of dimensions (number of conditions, conditionality compliance rates, 
programme completion rates, economic growth, capital flows, fiscal imbalances and 
debt levels). Broadly the same differences are observed by comparing “bad” 
successor arrangements with the remaining successor programmes. 

These findings provide some support for the Fund’s proposed strategy for 
identifying successful arrangements. As noted in Box 6, this strategy rests on two 
pillars: one comprises the existence and characteristics of successor programmes (to 
determine the persistence of b.o.p. problems over time), while the other comprises 
the changes in countries’ vulnerability ratings before and after a programme. The first 
of these pillars has been replicated here, using the same IMF criteria; the second 
pillar could not be directly replicated due to lack of information about the staff’s 
internal vulnerability ratings – though the economic outcomes associated with 
successor programmes provide some kind of proxy for these ratings. The analysis 
presented in this section highlights the fact that the two analytical pillars of the Fund’s 
strategy for measuring programme success are interrelated: persistent 
b.o.p. problems are also associated with worse economic results (and possibly with 
deteriorating vulnerability ratings). At the same time, the relatively frequent 
occurrence of programmes featuring persistent external imbalances would seem to 
pose important policy questions regarding the effectiveness of IMF lending and 
conditionality design that require an appropriate response. 

In any case, there is ample scope to improve on some aspects of the Fund’s 
proposed measures to ensure programme success, particularly those related to 

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the lack of transparency (in the case of countries’ vulnerability rating) and to the 
inherent arbitrariness of the threshold used for identifying cases of persisting 
b.o.p. needs. More specifically, as noted in Box 6, the threshold used to distinguish 
between “low access” and “high access” drawing programmes (i.e., between “good” 
and “bad” successor arrangements, in the terminology adopted in this report) is 
certainly too low because many arrangements whose amount is well below the 
normal access limits in cumulated terms are classified as “bad successors”. The 
choice of this threshold will remain a somewhat arbitrary exercise, but this does not 
imply that it should not be based on plausible considerations. In this respect, one 
aspect that remains to be explored is how the findings of this report would change if 
the threshold used to separate “good” and “bad” drawing successor arrangements 
were changed. 

4.2.4 

Main takeaways from the analysis of features and outcomes 

The main takeaways of Section 4.2, which is mostly based on the GRA-funded 
programmes approved in the 2008-18 period, can be summarised as follows. 

First, the global financial crisis had a visible impact on the performance and 
design of Fund-supported programmes. This is evident from the size of these 
arrangements, with the proliferation of EXA cases and a larger size of normal access 
programmes; their duration, as shown by the relentless increase in the number of 
EFFs to date; the large reduction in the number of SBAs approved on a precautionary 
basis; and the twofold increase in the number of programmes that went off-track. 

Conditionality also changed during the years of the global financial crisis. The 
average number of conditions by review was cut in half during the global financial 
crisis (although this result does not capture the “depth” of conditionality) while 
conditions became more tilted towards quantitative targets and less towards 
structural benchmarks – perhaps an indication of the urgency of the problems at the 
time. An additional finding is that Fund programmes continued to be dominated by 
fiscal and public sector conditions, followed by financial sector ones, throughout the 
2008-18 period. 

Some of those trends have reverted in the most recent period (2013-18). The 
number of conditions, particularly the structural ones, picked up again, and the 
number of EXA cases returned to the lower pre-crisis levels (although these 
programmes still account for over 60% of GRA resources committed over the period). 
In turn, the proportion of EFFs out of total Fund arrangements has continued to 
increase, while the large number and size of off-track programmes remains an 
unsolved issue. 

Second, countries’ post-programme economic performance has tended to 
improve. In particular, the relevant macroeconomic variables generally improved 
vis-à-vis the pre-programme period. External and fiscal positions improved 
considerably, growth typically rebounded, inflation declined and net private capital 
inflows stabilised or recovered slightly. Nevertheless, it is also fair to say that IMF 

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staff projections for growth at programme approval turned out to be too optimistic in 
most cases. 

Third, relevant differences were identified by examining specific categories of 
IMF programmes (see Table A.5, which summarises the conditionality arrangements 
and economic outcomes associated with these categories). In particular: 

• 

• 

• 

• 

EXA programmes, which are typically associated with countries with 
pronounced imbalances, pledged a large majority of IMF resources, even 
though their number has fallen in the most recent period. They typically 
entail more conditions, rely to a larger extent on prior actions and show 
somewhat lower levels of compliance. In addition, the improvement in economic 
variables seems to take longer than in normal access programmes, as would be 
natural in the case of countries affected by more severe imbalances and 
deteriorating market access. 

Resources committed to euro area programmes, most of which were of EXA 
type, came to represent over 50% of total GRA committed resources in 
2008-12, but fell to nil after the completion of the arrangements for Greece, 
Ireland and Portugal. Euro area programmes showed a larger share of financial 
sector conditions than other programmes, reflecting the financial implications of the 
sovereign crisis, although fiscal conditions were prevalent during the height of the 
crisis; these programmes also featured more structural conditions than the rest. In 
terms of outcomes, euro area countries underwent a protracted recession followed 
by a slow recovery; the deterioration in fiscal and external positions required a 
large adjustment and net private capital flows even turned negative during the 
programmes and recovered gradually. Among this group of programmes, the 
Greek ones perform differently from those of Ireland, Portugal and Cyprus. 

The proportion of EFF programmes increased markedly in the period 
under review; in turn, precautionary SBAs declined very markedly over the 
same period. EFFs display on average a larger number of conditions and tend to 
rely more on structural benchmarks and are longer than SBAs. In terms of 
outcomes, despite a weaker starting point, economic outcomes generally 
improve during EFF programmes, with growth differences versus SBAs 
disappearing over time. Precautionary programmes show a lower number of 
conditions, rely to a relatively low extent on structural benchmarks, and exhibit 
more stable growth rates on average and lower public debt levels and require a 
smaller fiscal adjustment. 

The number of programmes for countries undergoing some form of debt 
restructuring increased during the height of the global financial crisis and 
has remained relevant in terms of Fund resources. These arrangements 
feature more conditions and a higher share of fiscal-related ones. Preliminary 
results would seem to suggest that IMF programmes in combination with debt 
restructuring could have helped countries to improve their fiscal position and 
restore growth – though this result would need to be confirmed by more 
sophisticated analyses. 

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Finally, the analysis of serial Fund borrowing presented in Section 4.2.3 sheds 
further light on the circumstances affecting the ultimate success of IMF 
arrangements. Overall, these results confirm that persistent external imbalances are 
not an exception, and that these imbalances pose severe challenges to the 
effectiveness of IMF lending and the design of conditionality. 

Box 5 
Measuring country ownership 

The concept of ownership of IMF programmes has received increasing attention in recent years 
(see Section 3.2 and Box 2 on the perception of IMF stigma). National ownership of sound policies, 
together with adequate administrative capacity and strong political cohesion, are viewed as necessary 
(though not sufficient) conditions for successfully implementing Fund-supported programmes. 

Despite the increased recognition of its relevance, the options for measuring country 
ownership remain limited in practice. The only way to measure ownership directly seems to be to 
conduct a survey among Fund staff and country authorities (IMF, 2012b). This box gives a brief 
overview of other, indirect approaches and their limitations. 

One way to measure ownership is to check the degree of compliance with agreed conditions. 
Some facts in this respect are presented in Section 4.2. However, it must be taken into account that 
ownership is not the only factor determining compliance with conditions; implementation capacity, 
external shocks and other factors play a role as well. A related approach would be to look at the 
number of reforms backtracked by the authorities after they were first implemented. Again, the “willing 
assumption of responsibility” by country officials might not be the only reason for reverting reforms. In 
practice, the approach is limited as there seem to be no data readily available. 

Another proxy for ownership, which was used by Fund staff in the 2011 Review of 
Conditionality (IMF, 2012b), is the number of prior actions (PAs) at programme approval: a 
programme that does not “need” any PAs, or only a low number of them could be considered to reflect 
high ownership by the authorities. PAs were seen by Fund staff as a screening device used to ensure 
that the minimum necessary level of ownership is present for programme success. According to the 
IMF, a higher number of PAs at programme approval was associated with a lower implementation 
ratio of structural conditionality over the life of a programme, and the probability of a given review's 
including PAs was inversely related to the implementation record of previous reviews. However, as 
countries are not necessarily less willing or able to meet complex requirements, the number of PAs 
could also be seen from a different perspective: a high number of PAs could also reflect the 
authorities' commitment to reform and thus their ownership. 

Beyond the number of conditions, a time aspect might also be a useful proxy: the time it took 
to negotiate a programme or the delay of reviews could provide an indication of the 
ownership of national authorities. The limitations of this approach are similar to those mentioned 
above: ownership is not the only factor influencing the length of programme negotiations or reviews 
and data are not readily available. 

Finally, indicators of political stability, political cohesion or popular support could provide 
information on how broadly the commitment is anchored across the various national authorities. An 
analysis of the various available country indicators is beyond the scope of this report. 

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Box 6 
Measuring the success of GRA-funded programmes 

The success of GRA-funded arrangements ultimately hinges on their ability to achieve the 
two statutory objectives of Fund lending, namely: (a) solving countries’ b.o.p. problems during the 
programme period and (b) helping achieve medium-term external viability after programme 
completion. In its paper (IMF, 2019), the Fund proposed gauging the attainment of these objectives by 
considering, respectively, the nature of post-programme engagement and the evolution of certain 
“vulnerability indicators” produced internally by staff. 

As regards post-programme engagement, the IMF distinguishes between two types of 
b.o.p. situations. In positive Type I b.o.p. situations, the country’s b.o.p. problems would be 
substantially resolved with just one programme – in turn, this would require either no further 
arrangements, or successor programmes of a precautionary (i.e., non-drawing) nature, or purely 
“signalling” technical assistance arrangements such as the Policy Coordination Instruments or “low 
access” successor programmes (i.e. below a certain threshold relative to quotas).48  Conversely, in 
negative Type II b.o.p. situations, the country’s b.o.p. problems would continue unabated across two 
or more consecutive arrangements. These latter situations would therefore include all programmes 
that are followed by further drawing arrangements of “high access” size, i.e. above the threshold 
mentioned earlier. 

On the other hand, medium-term external viability is measured by the country ratings prepared 
by staff in the context of their internal “Vulnerability Exercises” (Ahuia et al., 2017). These 
exercises encompass a wide range of macroeconomic and financial indicators and rely heavily on the 
judgement of country teams. The final overall ratings have only three levels of vulnerability (“high”, 
“medium” and “low”); by definition, then, reductions in vulnerability ratings (from high to medium or low, 
or from medium to low) would identify programmes that can successfully restore medium-term viability. 

The features of post-programme engagement and the findings on vulnerability are then 
combined to determine programme success, with the help of a “transition matrix” describing the 
changes in vulnerability ratings before and after the programmes: 

Based on the proposed metrics, 32% of GRA-funded programmes approved in the 2011-17 
period would be assessed as successful, 43% as partly successful and 25% as unsuccessful. 
The IMF also finds that this measure of success is positively associated with programme completion 

48    In particular, “low access” drawing programmes are defined as programmes with annualised access of 
less than one-quarter of the annual exceptional access threshold. Based on this definition, “high access” 
drawing programmes would include a good proportion of Fund arrangements whose financial size is 
below the normal access limits in cumulated terms. 

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(about 60% of unsuccessful programmes went irretrievably off-track) and with cases in which 
programme design also included some form of sovereign debt relief. 

All such findings crucially depend on the judgemental elements embedded in vulnerability 
ratings. The results are also influenced by whether successor programmes are of a drawing type 
and, if so, by whether their size is above the threshold used to identify “low access” arrangements. 
Thus, the choice of this latter threshold (which is unavoidably arbitrary) also plays an important role in 
determining whether a Fund programme qualifies as a “successful” one or not. 

Box 7 
The Greek adjustment programmes and IMF conditionality 

Greece signed three adjustment programmes in 2010, 2012 and 2015, with joint conditionality 
by the European institutions and the IMF. In line with most programmes, the IMF’s broad 
objectives were to restore competitiveness and growth, fiscal sustainability and, later, financial 
stability. Conditionality largely focused on comprehensive monitoring of fiscal performance and, in the 
absence of the ability to use devaluation to boost competitiveness, on internal devaluation (wage 
cuts). Structural reforms were initially confined to macro-critical reforms, including modernising the 
public administration, streamlining the local authorities, improving the budgetary framework and data 
reporting, reforming social security, reducing risks from state-owned enterprises and enhancing tax 
administration. Over time, however, structural conditionality became less parsimonious, as it was 
largely driven by extensive EU conditionality (IMF, 2012c), and less focused on core Fund 
competencies. 

It is difficult to isolate and assess the success of the IMF intervention so shortly after the 
official completion of the programme. Flow imbalances, the public sector and current account 
deficits have been largely eliminated. However, the initial imbalances and the programmes which 
tried to address them had a severe impact in terms of economic and social costs. GDP declined by 
around one-quarter, while growth outcomes fell short of initial projections throughout the 
programmes, hinting at possible miscalculations. Moreover, stock imbalances remain. In 2009, the 
debt-to-GDP ratio stood at around 127%; by 2017, it had risen to almost 180%, in spite of private debt 
being cut by 50%. Unemployment is still extremely high, although it has fallen from a peak of 27.5% to 
18.9%. Finally, non-performing loans have risen sharply and, though falling, still account for around 
47% of banks’ total assets. 

Achievement of quantitative fiscal targets was generally strong. Similarly, the current account 
deficit declined, initially due to a sharp contraction in imports and latterly to strong export 
performance. Structural conditionality, however, displayed lower implementation rates, burdened by 
the large number of reforms, the weak administrative capacity, strong resistance by vested interests 
and gradual reform fatigue. Additionally, the cuts in Greek debt, designed to help debt sustainability, 
compromised financial stability, warranting new measures and additional financial assistance. 

The macroeconomic assumptions were overly optimistic 49, underestimating the recessionary 
effects of demand-contractionary policies (e.g. the size of fiscal multipliers, the effect of 
credit shrinkage on the financing of the real economy and investment, and the impact of wage 
and pension cuts). In addition, the assumptions regarding the growth payoff of structural reforms 
could have been more conservative, since it takes time for structural reforms to bear fruit. One 

49    This is not uncommon (Musso and Phillips, 2002; Baqir et al., 2005). 

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example of the implications of getting growth projections wrong is in the context of debt dynamics, 
where IMF-supported programmes predicted much lower debt-to-GDP ratios than have actually been 
achieved.50 

The appropriateness of the sequence of structural reforms (with labour market reforms 
preceding reforms in the product market51  and in institutional capacity and governance) has 
been widely debated, along with the effectiveness of the large number of conditions and their 
prioritisation. The Greek programmes illustrate that a few, well-targeted conditions have a positive 
impact on performance, while too many or too intrusive conditions may hinder it (Collier et al., 1997; 
Goldstein, 2000). 

The political economy of adjustment also posed challenges, for instance in fighting tax 
evasion and developing targeted social safety nets to achieve a more equitable distribution of 
adjustment costs and make conditionality more acceptable. Political consensus ensures a 
greater chance of success, since groups bearing the costs feel their sacrifice is recognised and that 
they participate in programme formulation (Killick et al., 1986). The European experience has shown 
that countries with a greater degree of consensus adjust more easily. 

Political will affects performance (Przeworski and Vreeland, 2000), but often political or social 
upheavals make governments unable to make credible commitments (Dreher, 2004). Greece's 
highly-demanding and reform-dense adjustment programmes required strong ownership by 
definition. However, compliance with conditionality and programme implementation in practice was 
complicated and adversely affected by strong vested interests, inefficient bureaucracy, less political 
stability and lack of political cohesion. 

There are also lessons for Fund collaboration with monetary unions and their regional 
financing arrangements in programme design. Cooperation agreements could cover 
information-sharing, the reconciliation of technical analysis, the division of labour in terms of design 
and monitoring, communication strategies and the existence of union-wide policies. In a currency 
union, political economy issues are more complex, including differences in mandates and systemic 
and contagion risk considerations. 

In sum, the Greek case shows that apart from the design of the programme, political 
circumstances and the expected payoffs of conditionality matter for outcomes. The growth 
effects of the conditions applied were overestimated, implying that the drop in output was 
considerably underestimated, and the negative effects on public welfare and ultimately on support for 
reform, were underestimated. Focused conditionality, improved communication, increased 
transparency and attention to macro-social implications could have raised public awareness and 
acceptance. Although meeting intermediate policy targets is often considered the key parameter for 
evaluating success, the programme’s impact on the economy and on social welfare in the long run 
still remains to be seen. 

50    See, for example, Baqir et al. (2005) and Helbling et al. (2004). 
51    The lack of emphasis on product market reforms led to falls in unit labour costs not passing through to 

price competitiveness. 

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Box 8 
Case Study Pakistan 

Over the last decade, Pakistan’s economy has been marked by repeated boom-bust cycles, 
accompanied by uneven implementation of policies and reforms. Pakistan has a long history of 
IMF-supported programmes (18 since 1958) and has been almost continuously under a Fund 
arrangement since the early 1990s. The last programme (EFF) which ended in 2016 was one of the 
very few that was entirely completed and did not go off-track after some time. In terms of size, the EFF 
was Pakistan's second largest programme with access to Fund resources of SDR 4.4 billion 
(USD 6.8 billion; 245% of quota). 

Looking at the overall figures, the implementation of the last EFF could be assessed as 
relatively satisfactory. Having met 57 out of the 72 quantitative performance criteria (QPCs) and 15 
out of the 23 indicative targets (ITs), the authorities complied with the majority of quantitative 
programme targets. On the structural side, 43 structural benchmarks (SBs) were met while only two 
were missed. However, the overall figures mask the fact that important QPCs were repeatedly 
adjusted downwards, particularly during the early phase of the programme. In addition, an important 
IT on the collection of tax revenues – which was introduced at the combined fifth and sixth review to 
facilitate improvements in this crucial area – was only met once in the seven programme reviews that 
followed. Furthermore, test dates for structural benchmarks that were critical for lasting programme 
success, such as those related to central bank independence or privatisation, were repeatedly 
postponed and in the latter case SBs were sometimes dropped entirely as a required condition. 

Turning to macroeconomic outcomes, at first glance the last programme also appears to have 
been quite successful. As the table shows, the current account deficit almost halved and stabilised 
thereafter, reserve buffers were rebuilt, the fiscal balance improved significantly and GDP growth 
recovered. Inflation also came back to single-digit levels. However, immediately after the programme 
period (i.e. T+4), the current account deficit widened considerably and reserve buffers started to be 
depleted. As illustrated in the chart, this development should not really come as a surprise. Almost all 
of the previous adjustment in the current account came from lower imports as a result of the slump in 
oil prices at the beginning of 2015. Exports as a percentage of GDP instead continued to decline 
since the year of programme approval. The oil price shock also had a positive effect on overall 
macroeconomic conditions and made it easier to achieve the quantitative targets set by the IMF 
programme. In fact, the oil price shock coincided almost perfectly with a marked improvement in 
programme compliance with the quantitative targets. At the same time, low oil prices might have 
alleviated the immediate pressure on the authorities to implement politically difficult decisions and 
undertake bold structural reforms necessary to end the familiar boom-bust cycle of Pakistan‘s 
economy. 

Developments since the end of the last programme have made it painfully clear that 
long-standing structural problems persist and have not been addressed satisfactorily by the 
programme. As also stressed by IMF staff in the first post-programme monitoring report, operational 
independence of the State Bank of Pakistan has not been sufficiently established. Similarly, progress 
in privatising loss-making state-owned enterprises has been limited. In addition, the authorities failed 
to seriously reform the tax system and broaden the tax base. Tax revenues as a percentage of GDP 
are still very low and have barely increased since 1990, resulting in sustained high gross (external) 
financing requirements. Pakistan continues to rank poorly for the quality of institutions and the 
business environment. Power sector performance remains weak with frequent line losses and theft. 
Most of these issues continue to place a direct or indirect strain on the external balance. 

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The case of Pakistan demonstrates that the IMF programme achieved macroeconomic 
stabilisation during an immediate b.o.p. crisis. However, imbalances quickly re-emerged. The 
long history of prolonged use of Fund resources suggests that a sustained adjustment will remain 
elusive in the absence of the necessary political ownership to implement reforms to seriously address 
Pakistan’s deep-rooted structural challenges. 

Table A 
Macroeconomic outcomes before and after the EFF-arrangement 

(T=2013) 

GDP growth (%)   

Public debt (%GDP) 

Primary balance (%GDP) 

Inflation (period average) 

Reserves (months of import) 

Current account (%GDP) 

Exports (%GDP) 

Imporst (%GDP) 

T-3 

T-2 

T-1 

T 

T+1 

T+2 

T+3 

T+4 

2.6 

60.6 

-1.7 

10.1 

4.7 

-2.2 

13.5 

19.4 

3.6 

58.9 

-2.9 

13.7 

4.2 

0.1 

14 

19 

3.8 

63.2 

-4.2 

11 

3.1 

-2.1 

12.4 

20.4 

3.7 

63.9 

-3.9 

7.4 

1.7 

-1.1 

13.3 

20.1 

4.1 

63.5 

-0.3 

8.6 

3.1 

-1.3 

12.2 

18.7 

4.1 

63.3 

-0.5 

4.5 

4.4 

-1 

10.6 

17.1 

4.6 

67.6 

-0.1 

2.9 

4.6 

-1.7 

9.1 

16.2 

Source: IMF October 2018 WEO database, World Development Indicators. 

Chart A 
Imports and oil prices before and after the EFF arrangement 

(T = 2013; y-axis: left-hand scale: imports of goods and services (as percentage of GDP); right-hand scale: oil price (USD per barrel)) 

Imports (left-hand scale)
Oil price (right-hand scale)

25

20

15

10

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

Source: World Development Indicators, FRED database. 

5.4 

67 

-1.4 

4.1 

3.2 

-4.1 

8.2 

17.6 

120

100

80

60

40

ECB Occasional Paper Series No 235 / October 2019 

45 

 
 
 
 
5 

Lessons, policy considerations and open 
issues 

The 2018 ROC provides an important opportunity to analyse whether IMF 
lending is adequately oriented to achieve its statutory objectives, including by 
addressing the measurement of key concepts such as the depth of 
conditionality, the degree of national ownership, and programme success. This 
report provides information and analysis that was intended to help European 
authorities to forge their positions on these matters. 

The available studies on the impact of Fund lending suggest that, as a result of 
IMF programmes, countries’ external and fiscal balances generally improve, 
but outcomes in terms of growth and net capital inflows remain somewhat 
mixed. In this respect, country fundamentals do matter in determining the effects of 
IMF programmes, as shown by the fact that, after the global financial crisis, 
worsening country fundamentals entailed larger and longer programmes and more 
difficult structural challenges, and were thus associated with a higher probability of 
non-compliance and programme failure. The findings in this report are broadly in line 
with the literature. In the aftermath of an IMF programme, all relevant macroeconomic 
variables tend to improve in comparison with the pre-programme period; in particular, 
external and fiscal positions improve considerably and growth typically rebounds, 
inflation declines and net private capital inflows stabilise or recover slightly. However, 
the improvement has generally fallen short of expectations, especially in terms of 
GDP growth and debt reduction. 

The analysis in the report shows that, during the period reviewed (2008-18), the 
characteristics of IMF programmes evolved with the macroeconomic context; 
in addition, a clear trend towards more structural conditionality and longer 
programme implementation horizons surfaced. The first years after the global 
financial crisis (2008-12) saw a much larger number of EXA programmes, required by 
countries with large imbalances and with an urgent need to stabilise their economy, 
which translated into a higher weight of macro conditionality. However, going beyond 
the specific financing needs of this particular period, and against a background of 
increasing global interconnectedness and economic complexity, programmes 
approved after 2012 have returned to include more structural conditionality while 
implementation horizons have lengthened, as illustrated by the increasing use of 
EFFs relative to standard SBAs. 

The 2018 ROC also touched upon the possible lengthening of IMF programmes 
and the associated repayment schedules. 52  This opens up several important 
questions. The length of programmes might be flexibly designed in order to allow 
more space for authorities’ decisions and more time for policies to have economic 
impact. On the other hand, longer EFF-funded programmes also have potential 

52    As requested by several country authorities that responded to a questionnaire circulated by the Fund last 

year. 

ECB Occasional Paper Series No 235 / October 2019 

46 

 
 
                                                                    
downsides, some of which had already been discussed in the past (e.g. the risks of 
reform fatigue and delaying needed adjustments or raising programme 
implementation risks by extending beyond electoral cycles). Moreover, since an 
extension of the EFF to four years was made possible, very few programmes that 
were approved for/extended to four years have completed all the reviews and 
disbursed the originally agreed amount. Would this situation be different if even 
longer programmes were allowed by the Fund? What would this mean for the 
success of programmes and the IMF's reputation? As epitomised by the experience 
with Pakistan, when the Fund engaged in a long-term relationship with borrowing 
members, including many successor arrangements, it could only obtain limited 
success. Finally, any extension in the maximum period for repaying Fund 
disbursements (equal to five years according to the AOA) would legally require a 
qualified majority decision by its Executive Board (85% of total voting power), which 
may be difficult to achieve. 

Perhaps one of the most prominent questions addressed in the 2018 ROC is 
the measurement of the success of Fund programmes. As explained in this 
report, the staff proposes to measure the success of GRA-funded programmes on the 
basis of two components linked to the statutory objectives of all IMF programmes: 
solving countries’ b.o.p. problems and restoring sustainable growth and external 
viability in the medium term. The Fund obtains mixed results from this exercise in 
terms of programme success: 32% of the programmes would be successful (both 
targets achieved), 43% partially successful (one target achieved) and 25% 
unsuccessful (none achieved). 

The indicator of programme success proposed by the IMF has some 
shortcomings. In particular, the basis for the assumptions about the persistence of 
b.o.p. needs across different programmes is unclear, as is the basis for the value 
judgements on countries’ vulnerabilities reached internally by the staff. The sensitivity 
of the indicator of programme success to those assumptions, combined with the key 
role played by judgemental elements, would advise caution before drawing firm policy 
conclusions. Thus, further investigations on how to better design the criteria for 
measuring programme success appear warranted at this juncture. 

Despite these problems, the analytical strategy proposed by the IMF for 
measuring programme success is a step in the right direction. This report’s 
preliminary analysis of “serial borrowing” – using the Fund's criteria to distinguish 
successor arrangements associated with persisting b.o.p. imbalances from the 
remaining successor programmes – seems to lead to relevant policy conclusions, 
and therefore implicitly provides some support for the Fund’s proposed strategy. In 
particular, the persistence of b.o.p. imbalances across different programmes is 
strongly associated with a worse programme performance over a variety of 
dimensions (conditionality compliance rates, programme completion rates, economic 
growth, capital flows, fiscal imbalances and debt levels). Given the relatively frequent 
occurrence of cases with persistent external imbalances, these findings pose 
important policy questions that require an appropriately structured response. 

The discussion on programme success is linked to other specific issues 
related to programme design and conditionality and how they contribute to 

ECB Occasional Paper Series No 235 / October 2019 

47 

 
 
more effective IMF lending. The 2018 ROC focuses on some of these issues, such 
as the observation of a recently stronger move towards more structural conditionality 
and longer programmes (discussed earlier in this section), the quality of fiscal 
conditionality, ownership and parsimony, or the impact of debt restructuring on 
programme success. While the five principles for conditionality (see Section 3.2) 
remain valid, more work needs to be done in particular on principle 1 (ownership) and 
principle 2 (parsimony). 

Given the complexity of implementing structural conditionality, the phasing of 
the conditions has become a major aspect of programme design, an aspect 
that has to be coupled with parsimony. The empirical studies reviewed in this 
report53  have found negative correlation between the number of conditions and 
meeting policy targets. The Fund‘s own research has also found that the depth of 
conditions is inversely related to the number of conditions (cf. footnote 33) and that a 
high number of conditions is more likely to erode ownership. Better design of 
structural conditionality and, in principle, more parsimony are critically needed to 
ensure adequate prioritisation of policies and reduce uncertainty with regard to the 
capacity of the programme country to implement the measures effectively. 
Nevertheless, the relative importance of the depth and parsimony of conditionality 
has to be more convincingly analysed, including the need to adequately sequence 
structural reforms in order to achieve success. In addition, programmes need to take 
into account the fact that countries which are members of a currency union do not 
have exchange rate policies as an available tool and might need more structural 
reforms than others. More analytical work is also warranted to make assumptions 
more realistic and reduce the repercussions of projection errors on policy design. 

Another link to be studied further is the relationship between the number of 
conditions and ownership. Ownership is key for programme success and needs to 
be improved. Social acceptance of programme conditionality can be enhanced by 
transparency, communication and fair distribution of adjustment costs and 
appropriate safeguarding of social policies (linked to the ongoing work on the 
strategic framework on social spending). Policies to smooth the social costs of 
macroeconomic adjustment appear to have been incorporated more strongly into IMF 
programmes only recently. Better consideration of these aspects in programme 
design might help increase social acceptance, ownership and ultimately the success 
of programmes. Tackling the perception of stigma through engagement and better 
communication is another important aspect. Market access and private capital flows 
are also highly affected by credibility and confidence, which is built not just by signing 
off on an IMF programme but by successfully implementing it. 

Fiscal matters – namely, the quality of fiscal conditionality and the role of debt 
restructuring – also figure prominently in the 2018 ROC. Regarding the quality of 
fiscal conditionality, the empirical literature reviewed in this report points to the fact 
that to be sustainable, fiscal adjustment has to go beyond short-term measures and 
address the fiscal vulnerabilities of programme countries, on both the expenditure 
and the taxation sides. There is plenty of evidence that fiscal consolidation focused 

53    In particular, those studies isolating the impact of IMF conditionality on policy targets and macroeconomic 

objectives; see Section 4.1 (p. 26). 

ECB Occasional Paper Series No 235 / October 2019 

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on public investment and some types of social expenditure alone might deliver the 
required results in the short term but need to be followed up by structural fiscal 
consolidation to support growth potential and secure long-term fiscal sustainability. 
The second fiscal aspect of relevance is the role of debt restructuring – or of debt 
reprofiling – in ensuring the success of Fund programmes. The Fund's concern is 
rooted in the idea that debt treatment often comes “too little, too late”, perhaps due to 
problems of perceived stigma. However, caution against a general strategy on this 
issue is of the essence; a case-by-case approach consistent with established IMF 
rules and frameworks should continue to be preferred. In any event, debt treatment 
cannot be viewed as a silver bullet for resolving countries’ deep rooted structural 
flaws. In particular, the relief offered by debt restructuring would only be ephemeral if 
it were not combined with determined policy strategies to address the underlying 
long-term problems. 

There are other aspects of the current ROC exercise that have not been examined in 
this report, such as evenhandedness or the effectiveness of PRGT-funded 
programmes, as some prioritisation was necessary. 

Finally, it should be underlined that the analysis of conditionality would greatly 
benefit from improved data. As discussed in Section 4.2, the MONA dataset has a 
number of drawbacks and could be improved by filling in the gaps and ensuring 
consistency in terms of number of conditions, their description and classification. 
Information on structural conditions could also be complemented by an indicator of 
the “depth” of these conditions (which is calculated by the Fund’s staff, but not made 
public). The treatment of conditions of interrupted or cancelled programmes should 
also be clarified. The Fund’s commitment to improve this database and make it more 
effective and user-friendly is welcome. 

ECB Occasional Paper Series No 235 / October 2019 

49 

 
 
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Annex 1: Tables and charts 

Table A.1 
GRA-supported programmes 

(2008-18) 

Period covered 

2008-2018 

Total nº of arrangements 

SBA (incl. blended) 

SBA Precautionary 

EFF (incl.blended) 

Euro area (EA) programs 

Exceptional Access 

Off-track programs 

Programs involving debt restructuring 

Single 

Followed by a succesor 

Successor 

Total nº of countries 

Countries with more than one program   

EA Countries 

Non-EA countries 

73 

49 

15 

24 

5 

19 

24 

14 

29 

17 

27 

41 

20 

4 

37 

% in total sample 

% in total GRA resources* 

100.0 

100.0 

60.5 

4.8 

39.5 

37.0 

81.2 

42.7 

30.3 

46.3 

23.8 

29.9 

67.1 

20.5 

32.9 

6.8 

26.0 

32.9 

19.2 

39.7 

23.3 

37.0 

100.0 

48.8 

9.8 

90.2 

Notes: * Weight of each category in the total GRA resources committed over 2008-2018. See Section 4.2.1 for definitions of programme 
types. 

Table A.2 
GRA-supported programmes 

(by period) 

Period covered 

2002-2007 

2008-2012 

2013-2018 

% 
total 

% in total GRA 
resources* 

% 
total 

% in total GRA 
resources* 

% 
total 

% in total GRA 
resources* 

Total nº of arrangements 

36 

100 

100  42 

100 

100  31 

100 

SBA (incl. blended) 

35 

97.2 

99.0  36 

85.7 

58.9  13 

41.9 

SBA Precautionary 

19 

52.8 

EFF (incl.blended) 

EA programs 

Exceptional Access 

Off-track programs 

Programs involving debt 
restructuring 

1 

0 

4 

7 

0 

2.8 

0 

11.1 

19.4 

0 

8.2 

1.0 

0.0 

9 

6 

4 

21.4 

14.3 

9.5 

82.6  15 

35.7 

17.1  15 

35.7 

4.0 

6 

19.4 

41.1  18 

58.1 

56.7 

90.1 

47.1 

1 

4 

9 

3.2 

12.9 

29.0 

0.0 

9 

21.4 

31.2 

5 

16.1 

100 

63.4 

6.1 

36.6 

1.0 

65.1 

34.6 

28.7 

Note: See Section 4.2.1 for definitions of programme types. 

ECB Occasional Paper Series No 235 / October 2019 

58 

 
 
 
 
 
  
  
  
  
  
  
  
  
 
Table A.3 
Conditionality: number, type and policy area of conditions 

(2008-18) 

SBA 

EFF 

Sample 

Average no. of 
conditions by 
completed review 

Type of Condition (%total) 

Policy Area (%total) 

PA  QPC  SPC  SB 

IT 

Fiscal    Financial  Central Bank  Other 

9.2  18.4 

6.6 

2.7  62.6 

9.7 

61.8 

11.2  17.7 

2.0 

0.0  73.1 

7.3 

65.0 

Precautionary 

8.8  13.0 

8.0 

2.0  58.7  18.3 

62.7 

Non Precautionary 

10.2  19.5 

4.3 

1.7  68.0 

6.5 

62.9 

Euro Area   

9.6  28.0 

2.1 

0.0  66.3 

3.5 

52.1 

EA Without Greece 

5.2  20.0 

1.1 

0.0  76.4 

2.5 

41.6 

Non Euro Area   

9.9  17.4 

5.3 

1.9  66.0 

9.3 

63.6 

Exceptional Access   

11.3  22.2 

5.3 

4.7  61.6 

6.1 

51.6 

Normal Access   

9.4  16.7 

5.0 

0.8  67.6 

9.9 

66.8 

Debt Restructuring   

11.1  20.4 

4.5 

2.9  64.4 

7.9 

67.7 

Non Debt Restructuring 

9.6  17.6 

5.2 

1.5  66.5 

9.2 

61.7 

Single   

7.6  17.5 

3.9 

1.1  69.8 

7.7 

54.4 

21.2 

23.4 

22.2 

21.8 

36.6 

48.9 

20.8 

29.7 

19.2 

18.6 

22.7 

27.9 

13.1 

4.0 

5.6 

6.0 

12.3 

2.9 

10.2 

5.1 

2.6 

8.7 

3.3 

6.1 

11.2 

4.3 

12.2 

6.5 

10.1 

4.0 

9.1 

4.6 

11.0 

4.6 

12.7 

5.0 

Programs followed by 
“good” successors 

Programs followed by 
“bad” successors 

"Good" succesor 

"Bad" successor 

6.2  14.7 

5.5 

4.2  61.9  13.7 

69.1 

18.0 

8.6 

4.2 

12.4  24.0 

6.8 

3.1  60.7 

5.4 

65.6 

10.9  11.4 

7.9 

0.0  68.0  12.7 

74.0 

15.3  24.2 

2.7 

0.0  66.2 

6.9 

68.9 

17.8 

17.3 

16.9 

12.7 

3.9 

5.1 

3.6 

6.7 

7.6 

Notes: See Section 4.2.1 for definitions of programme types. 
Single = programmes without any successors. 
First (bad or good) = programmes followed by a successor, irrespective of whether they are successors themselves or not. 
“Good” successors = successor arrangements (i.e. approved within two years of their predecessor) that are either precautionary or 
drawn for an annualized amount of less than one quarter of the annual exceptional access limit. 
“Bad” successors = successors arrangements (i.e. approved within two years of their predecessor) that are drawn for an annualized 
amount of more than one quarter of the annual exceptional access limit. 

ECB Occasional Paper Series No 235 / October 2019 

59 

 
 
 
 
Table A.4 
Conditionality: Prior actions, compliance and completion rates 

(2008-18) 

Sample 

SBA 

EFF 

Precautionary 

Non Precautionary 

Euro Area 

EA Without Greece 

Non Euro Area 

Exceptional Access 

Normal Access 

Debt Restructuring 

Non Debt Restructuring 

Single 

Programs followed by 
good successors 

Programs followed by 
bad successors 

"Good" succesor 

"Bad" successor 

Average no. of 
PAs by 
completed 
review 

Compliance with conditionality 
(% total conditions) 

Program completion rates 
(% total programs) 

Met Partially 
or with Delay 

Not Met or 
Delayed 

Completed 
most reviews 

Off-track 
mid-program 

Quickly 
off track 

Met 

2.0  72.1 

3.0  69.9 

0.9  79.0 

2.7  69.6 

3.5  59.6 

1.1  71.3 

2.3  72.3 

3.7  64.1 

1.8  74.0 

3.4  72.4 

2.1  71.0 

1.9  72.0 

15.3 

16.0 

9.9 

16.8 

26.1 

24.8 

14.7 

18.0 

14.6 

15.1 

15.6 

18.3 

12.5 

14.1 

11.2 

13.5 

14.3 

3.9 

13.0 

11.5 

11.4 

12.4 

13.2 

9.8 

59.2 

83.3 

60.0 

69.0 

60.0 

100.0 

67.7 

63.2 

68.5 

42.9 

72.9 

86.2 

10.2 

4.2 

0.0 

10.3 

40.0 

0.0 

5.9 

15.8 

5.6 

28.6 

3.4 

0.0 

30.6 

12.5 

40.0 

20.7 

0.0 

0.0 

26.5 

21.1 

25.9 

28.6 

23.7 

13.8 

0.7  80.4 

9.8 

9.8 

69.2 

0.0 

30.8 

3.7  60.2 

1.1  79.2 

5.1  70.6 

21.4 

8.7 

14.4 

17.9 

12.2 

15.0 

35.7 

61.5 

57.1 

35.7 

0.0 

7.1 

28.6 

38.5 

35.7 

Notes: See Section 4.2.1 for definitions of programme types. 
Single = programmes without any successors. 
First (bad or good) = programmes followed by a successor, irrespective of whether they are successors themselves or not. 
“Good” successors = successor arrangements (i.e. approved within two years of their predecessor) that are either precautionary or 
drawn for an annualized amount of less than one quarter of the annual exceptional access limit. 
“Bad” successors = successors arrangements (i.e. approved within two years of their predecessor) that are drawn for an annualized 
amount of more than one quarter of the annual exceptional access limit. 

ECB Occasional Paper Series No 235 / October 2019 

60 

 
 
 
Table A.5 
Main features and outcomes of different programme categories 

ECB Occasional Paper Series No 235 / October 2019 

61 

 
 
 
 
Chart A.1 
Overview of programme size and conditionality 

(median; percentage of quota) 

(median; percentage of GDP) 

All programmes
SBA

EFF
Median (2002-2018)

a) Programme size

b) Programme size

1,250

1,000

750

500

250

0

5

4

3

2

1

0

2002-2007

2008-2012

2013-2018

2002-2007

2008-2012

2013-2018

(mean; percentage of quota) 

(mean; percentage of GDP) 

All programmes
SBA

EFF
Mean (2002-2018)

c) Programme size – normal access only

d) Programme size – normal access only

350

300

250

200

150

100

50

0

3

2

1

0

2002-2007

2008-2012

2013-2018

2002-2007

2008-2012

2013-2018

(percentage total) 

(percentage total) 

All programmes
SBA

SPC
EFF

PA
QPC
SPC

SB
IT

e) Average number of conditions by completed 
review

f) Conditionality: type of conditions

25

20

15

10

5

0

100

90

80

70

60

50

40

30

20

10

0

2002

-

2007 2008

-

2012 2013

-

2018

2002-2007

2008-2012

2013-2018

ECB Occasional Paper Series No 235 / October 2019 

62 

 
 
 
 
 
 
 
 
 
 
 
 
(percentage total) 

(percentage total) 

Fiscal
Financial

Central bank
Other

Completed most reviews
Off-track mid-program
Quickly off track

g) Conditionality: policy area

h) Programme completion rates

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

2002-2007

2008-2012

2013-2018

2002-2007

2008-2012

2013-2018

(percentage total) 

(percentage total) 

Met
Met partially or with delay

Delayed
Not met

All
SBA
EFF

i) Compliance rates

j) Average number of PAs by completed review

100

90

80

70

60

50

40

30

20

10

0

6

5

4

3

2

1

0

2002-2007

2008-2012

2013-2018

2002-2007

2008-2012

2013-2018

ECB Occasional Paper Series No 235 / October 2019 

63 

 
 
 
 
 
 
 
 
 
 
 
Chart A.2a 
Macroeconomic outcomes and staff projection errors of GRA programmes 

a) Real GDP (change in percent per year)

b) Real GDP projection error (act. - proj.)

8

6

4

2

0

-2

-2

-4

-6

-8

-10

-12

80

60

40

20

1

0

-1

-2

-3

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

T

T+1

T+2

T+3

T+4

c) Current account (% of GDP)

d) CA projection error (act. - proj.)

4

2

0

-2

-4

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

T

T+1

T+2

T+3

T+4

e) Gross public debt (% of GDP)

f) Public debt projection error (act. - proj.)

15

10

5

0

-5

-10

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

T

T+1

T+2

T+3

T+4

Sources: IMF World Economic Outlook October 2018, IMF programme documents, IMF b.o.p. statistics and own calculations. 
Notes: The solid blue line indicates programme country averages, while the shaded light blue area indicates the 25 and 75 percentiles. 
For projection errors, staff projections at the time of programme approval are compared with actual outcomes. 

ECB Occasional Paper Series No 235 / October 2019 

64 

 
 
 
Chart A.2b 
Macroeconomic outcomes of GRA programmes: additional variables 

a) Consumer Price Index (change in percent per 
year)

b) Primary balance (% of GDP) 

10

8

6

4

2

0

6

5

4

3

2

2

0

-2

-4

-6

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

c) Reserves (in months of imports)

d) Net private captial flows (% of GDP)

12

10

8

6

4

2

0

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

Sources: IMF World Economic Outlook October 2018, IMF programme documents, IMF b.o.p. statistics and own calculations. 
Notes: The solid blue line indicates programme country averages, while the shaded light blue area indicates the 25 and 75 percentiles. 
For projection errors, staff projections at the time of programme approval are compared with actual outcomes. 

ECB Occasional Paper Series No 235 / October 2019 

65 

 
 
 
Chart A.3 
Growth outcomes of GRA-funded programmes (“large” versus “moderate” fiscal 
adjustment) 

a) Real GDP (change in percent per year)

b) Real GDP projection errors (act. - proj.)

10

5

0

-5

2

1

0

-1

-2

-3

T-3

T-2

T-1

T

T+1

T+2

T+3

T+4

T

T+1

T+2

T+3

T+4

Sources: IMF World Economic Outlook October 2018, IMF programme documents and own calculations. 
Notes: The solid lines indicate programme country averages, while the shaded light blue areas indicate the 25 and 75 percentiles. Blue 
denotes countries with “moderate” fiscal adjustment, while light red denotes countries with a “large” adjustment during the programme. A 
relatively “large” fiscal adjustment is defined as a three-year adjustment of the primary balance (starting at programme approval) greater 
than 3% of GDP. This threshold has been shown by the IMF to approximate the top quartile using historical data that cover annual 
observations from 1990 to 2011 for advanced and emerging economies with debt greater than 60% of GDP (see IMF MAC DSA). 

ECB Occasional Paper Series No 235 / October 2019 

66 

 
 
 
Chart A.4 
Macroeconomic outcomes of GRA programmes: normal (54) versus exceptional 
access programmes (19) (conditional means) 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Current account balance

5%

4%

3%

2%

1%

0%

-1%

-2%

0%

-1%

-2%

-3%

-4%

-5%

-6%

-7%

-8%

-9%

-10%

Programs under exceptional
access policy

Other programs

Programs under exceptional
access policy

Other programs

(period ranges; as percentage of GDP)   

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

c) Gross public debt

d) Primary balance

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

0.5%

0.0%

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

-3.0%

-3.5%

-4.0%

Programs under exceptional
access policy

Other programs

Programs under exceptional
access policy

Other programs

(period averages; in months of imports)   

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

e) Official reserves

f) Net private capital flows

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Programs under exceptional
access policy

Other programs

Programs under exceptional
access policy

Other programs

ECB Occasional Paper Series No 235 / October 2019 

67 

 
 
 
 
 
 
 
 
 
 
Chart A.5 
Macroeconomic outcomes of GRA programmes: euro area programmes (5) versus 
other programmes (68) (conditional means) 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Current account balance

5%

4%

3%

2%

1%

0%

-1%

-2%

-3%

0%

-2%

-4%

-6%

-8%

-10%

-12%

Euro area

Other countries

Euro area

Other countries

(period averages; as percentage of GDP) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

c) Gross public debt

d) Primary balance

160%

140%

120%

100%

80%

60%

40%

20%

0%

1%

0%

-1%

-2%

-3%

-4%

-5%

-6%

Euro area

Other countries

Euro area

Other countries

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

e) Net private capital inflows

10%

8%

6%

4%

2%

0%

-2%

-4%

-6%

-8%

Euro area

Other countries

ECB Occasional Paper Series No 235 / October 2019 

68 

 
 
 
 
 
 
 
 
 
Chart A.6 
Macroeconomic outcomes of GRA programmes: Stand-By-Arrangements (49) versus 
Extended Fund Facilities (24) (conditional means) 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Current account balance

5%

4%

3%

2%

1%

0%

0%

-1%

-2%

-3%

-4%

-5%

-6%

-7%

-8%

-9%

SBA

EFF

SBA

EFF

(period averages; as percentage of GDP) 

(period averages; as period of GDP) 

Before the program
During the program
After the program

c) Gross public debt

d) Primary balance

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

1.5%

1.0%

0.5%

0.0%

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

SBA

EFF

SBA

EFF

ECB Occasional Paper Series No 235 / October 2019 

69 

 
 
 
 
 
 
 
 
Chart A.7 
Macroeconomic outcomes of GRA programmes. Programmes associated with debt 
restructuring operations (14) versus other programmes (59) (conditional means) 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Gross public debt

5%

4%

3%

2%

1%

0%

-1%

120%

100%

80%

60%

40%

20%

0%

Programs associated with
debt restructuring

Other programs

Programs associated with
debt restructuring

Other programs

(period averages; as percentage of GDP) 

(period averages; as period of GDP) 

Before the program
During the program
After the program

c) Primary balance

d) Net capital inflows

4%

3%

2%

1%

0%

-1%

-2%

-3%

Programs associated with
debt restructuring

Other programs

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Programs associated with
debt restructuring

Other programs

Sources: IMF World Economic Outlook October 2018, IMF programme documents, IMF b.o.p. statistics and own calculations. Trebesch, 
NEW 2014 Update of Haircut Dataset, Bank of Canada Database of Sovereign Defaults. 

ECB Occasional Paper Series No 235 / October 2019 

70 

 
 
 
 
 
 
 
Chart A.8 
Macroeconomic outcomes of GRA programmes: programmes off-track (24) versus 
other programmes (49) (conditional means) 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Net private capital inflows

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

Programs off-track

Other programs

Programs off-track

Other programs

Sources: IMF World Economic Outlook October 2018, IMF programme documents, IMF b.o.p. statistics and own calculations. 

ECB Occasional Paper Series No 235 / October 2019 

71 

 
 
 
 
 
Chart A.9 
Macroeconomic outcomes of GRA programmes. Programmes followed by “bad” 
successor programmes (“first-bad”) versus programmes followed by “good” successor 
programmes (“first-good”) versus stand-alone programmes (“single”) 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Current account balance

5%

4%

3%

2%

1%

0%

-1%

0%

-2%

-4%

-6%

-8%

-10%

-12%

First bad

First good

Single programs

First bad

First good

Single programs

(period averages; as percentage of GDP) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

c) Gross public debt

d) Primary balance

80%

70%

60%

50%

40%

30%

20%

10%

0%

0.0%

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

First bad

First good

Single programs

First bad

First good

Single programs

(period averages; in months of imports)   

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

e) Official reserves

f) Net private capital inflows

6

5

4

3

2

1

0

12%

10%

8%

6%

4%

2%

0%

First bad

First good

Single programs

First bad

First good

Single programs

ECB Occasional Paper Series No 235 / October 2019 

72 

 
 
 
 
 
 
 
 
 
 
Chart A.10 
Macroeconomic outcomes of GRA programmes. “Bad” successor programmes versus 
“good” successor programmes 

(period averages; annual rate) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

a) Economic growth

b) Current account balance

4.5%

4.0%

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0%

0%

-1%

-2%

-3%

-4%

-5%

-6%

-7%

-8%

-9%

-10%

Bad successors

Good successors

Bad successors

Good successors

(period averages; as percentage of GDP) 

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

c) Gross public debt

d) Primary balance

80%

70%

60%

50%

40%

30%

20%

10%

0%

1.0%

0.5%

0.0%

-0.5%

-1.0%

-1.5%

-2.0%

-2.5%

Bad successors

Good successors

Bad successors

Good successors

(period averages; in months of imports)   

(period averages; as percentage of GDP) 

Before the program
During the program
After the program

e) Official reserves

f) Net private capital inflows

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

8%

7%

6%

5%

4%

3%

2%

1%

0%

Bad successors

Good successors

Bad successors

Good successors

ECB Occasional Paper Series No 235 / October 2019 

73 

 
 
 
 
 
 
 
 
 
 
Annex 2: Additional tables and charts 

Table A.6 
GRA-supported programmes, by type 

(2008-18) 

Number of 
Arrangements 
(Total = 73) 

SBA 
(incl. 
blended) 

EFF (incl. 
blended) 

Non 
Euro 
Area   Precautionary 

Euro 
Area   

Non 
Precautionary   

Exceptional 
Access 

Regular 
Access 

Off-track 
programs 

Non 
Off-track 
programs 

Programs 
involving 
debt 
restructuring 

Non debt 

restructuring  Single 

First 
programs 
followed by 
good 
successors 

First 
programs 
followed by 
bad 
successors 

Successor 
Good 

Successor 
Bad 

SBA (incl. blended) 

EFF (incl. blended) 

Euro area   

Non Euro Area 

Precautionary 

Non Precautionary 

Exceptional Access 

Regular Access 

Off-track programs 

Non Off-track programs 

Programs involving 
debt restructuring 

Non Debt Restructuring 

Single 

First programs followed 
by good successors 

First programs followed 
by bad successors 

Successor Good 

Successor Bad 

49 

0 

1 

48 

15 

34 

14 

35 

20 

29 

9 

40 

18 

0 

24 

4 

20 

0 

24 

5 

19 

4 

20 

5 

19 

12 

1 

4 

5 

0 

0 

5 

4 

1 

2 

3 

3 

2 

3 

48 

20 

0 

68 

15 

53 

15 

53 

22 

46 

11 

57 

27 

6 

0 

0 

6 

10 

10 

5 

0 

3 

9 

1 

0 

1 

9 

13 

13 

Note: See Section 4.2.1 for definitions of programme types. 

15 

0 

0 

15 

15 

0 

0 

15 

6 

9 

3 

12 

3 

3 

0 

9 

0 

34 

24 

5 

53 

0 

58 

19 

39 

18 

40 

11 

47 

27 

3 

10 

4 

14 

14 

5 

4 

15 

0 

19 

19 

0 

7 

12 

4 

15 

8 

2 

5 

0 

4 

35 

19 

1 

53 

15 

39 

0 

54 

17 

37 

10 

44 

22 

4 

5 

13 

10 

20 

4 

2 

22 

6 

18 

7 

17 

24 

0 

8 

16 

4 

2 

7 

5 

7 

29 

20 

3 

46 

9 

40 

12 

37 

0 

49 

6 

43 

25 

4 

3 

8 

8 

9 

5 

3 

11 

3 

11 

4 

10 

8 

6 

14 

0 

3 

1 

3 

2 

5 

40 

19 

2 

57 

12 

47 

15 

44 

16 

43 

0 

59 

27 

5 

7 

11 

9 

18 

12 

3 

27 

3 

27 

8 

22 

4 

25 

3 

27 

30 

0 

0 

0 

0 

6 

0 

0 

6 

3 

3 

2 

4 

2 

4 

1 

5 

0 

6 

0 

0 

0 

10 

0 

1 

9 

0 

10 

5 

5 

7 

3 

3 

7 

0 

0 

10 

0 

0 

10 

3 

0 

13 

9 

4 

0 

13 

5 

8 

2 

11 

0 

0 

0 

13 

0 

ECB Occasional Paper Series No 235 / October 2019 

5 

9 

1 

13 

0 

14 

4 

10 

7 

8 

5 

9 

0 

0 

0 

0 

14 

74 

 
 
Table A.7 
Conditionality: number, type and policy area of conditions 

(2008-12) 

SBA 

EFF 

Sample 

Average no. of 
conditions by 
completed review 

Type of Condition (%total) 

Policy Area (%total) 

PA  QPC  SPC  SB 

IT 

Fiscal  Financial  Central Bank  Other 

7.5  20.1 

6.2 

3.6  61.2 

8.9 

59.8 

8.2  21.8 

0.3 

0.0  72.9 

5.1 

59.9 

Precautionary 

5.4  15.1 

8.2 

3.3  54.6  18.9 

52.9 

Non Precautionary 

8.1  21.7 

4.6 

3.1  65.1 

5.5 

61.7 

Euro Area 

10.3  30.5 

1.9 

0.0  64.0 

3.6 

56.4 

EA Without Greece 

5.2  20.0 

1.1 

0.0  76.4 

2.5 

41.6 

non Euro Area 

7.3  19.2 

5.7 

3.4  62.7 

8.9 

60.2 

Exceptional Access 

9.7  21.9 

4.8 

6.0  61.3 

6.0 

52.2 

Normal Access 

6.3  19.5 

5.6 

1.5  63.7 

9.7 

64.0 

Debt Restructuring 

8.6  19.8 

4.7 

4.6  64.1 

6.9 

71.2 

Non Debt Restructuring 

7.4  20.5 

5.5 

2.7  62.5 

8.8 

56.7 

24.4 

28.0 

30.9 

23.3 

32.5 

48.9 

24.2 

32.2 

20.9 

16.3 

27.3 

12.3 

3.5 

4.5 

7.6 

12.9 

3.3 

10.7 

4.3 

0.7 

10.4 

3.3 

6.1 

12.3 

3.4 

10.4 

5.2 

11.6 

3.5 

9.4 

3.1 

11.6 

4.4 

Table A.8 
Conditionality: prior actions, compliance and completion rates 

(2008-12) 

Sample 

SBA 

EFF 

Precautionary 

Non 
Precautionary 

Euro Area 

EA Without 

Greece 

Non Euro Area 

Exceptional 
Access 

Normal Access 

Debt 
Restructuring 

Non Debt 
Restructuring 

Compliance with conditionality (% total 
conditions) 

Program completion rates (% total 
programs) 

Average no. of 
PAs by 
completed 
review 

Met Partially 
or with 
Delay 

Met 

Delayed 

Not Met or 
Delayed 

Completed 
most reviews 

Off-track 
mid-program 

Quickly 
off track 

1.7  71.2 

2.7  67.5 

0.8  88.0 

2.1  67.3 

4.0  60.9 

1.1  71.3 

1.6  71.7 

2.8  64.4 

1.3  74.6 

16.5 

18.3 

9.1 

18.2 

22.6 

24.8 

16.1 

17.6 

16.2 

0.2 

0.0 

0.0 

0.2 

0.0 

0.0 

0.2 

0.4 

0.0 

12.4 

14.2 

2.9 

14.5 

16.5 

3.9 

12.2 

11.9 

9.1 

61.1 

83.3 

55.6 

66.7 

50.0 

100.0 

65.8 

66.7 

63.0 

13.9 

16.7 

25.0 

0.0 

0.0 

44.4 

18.2 

50.0 

15.2 

0.0 

0.0 

0.0 

10.5 

23.7 

20.0 

11.1 

13.3 

25.9 

2.3  71.6 

13.7 

0.0 

14.6 

33.3 

44.4 

22.2 

1.8  70.3 

17.6 

0.2 

12.1 

72.7 

6.1 

21.2 

ECB Occasional Paper Series No 235 / October 2019 

75 

 
 
 
 
 
 
Table A.9 
Conditionality: number, type and policy area of conditions 

(2013-18) 

Sample 

Average no. of conditions 
by completed review 

PA  QPC  SPC  SB 

IT 

Fiscal  Financial  Central Bank  Other 

Type of Condition (%total) 

Policy Area (%total) 

SBA 

EFF 

14.2  13.7 

7.7 

0.0  66.6  12.0 

67.4 

12.3  16.3 

2.5 

0.0  73.1 

8.0 

66.7 

Precautionary 

12.3 

9.8 

7.8 

0.0  64.9  17.5 

77.4 

Non Precautionary 

13.2  16.5 

3.9 

0.0  71.7 

7.8 

64.5 

12.1 

21.9 

9.1 

19.9 

53.3 

16.6 

20.1 

17.5 

15.4 

5.2 

5.9 

5.5 

11.4 

2.1 

9.5 

6.1 

10.0 

1.7 

9.9 

5.5 

19.1 

11.4 

8.5 

4.5 

6.8  18.0 

3.3 

0.0  75.4 

3.3 

35.0 

13.2  15.1 

4.7 

0.0  70.2 

9.9 

68.0 

19.1  23.6 

7.3 

0.0  62.6 

6.5 

49.4 

12.3  14.0 

4.3 

0.0  71.6  10.2 

69.6 

15.1  21.3 

4.1 

0.0  64.9 

9.7 

61.5 

22.7 

8.6 

7.3 

12.6  14.1 

4.8 

0.0  71.4 

9.7 

68.0 

16.9 

10.1 

5.0 

Euro Area 

Non Euro Area 

Exceptional 
Access 

Normal Access 

Debt 
Restructuring 

Non Debt 
Restructuring 

Table A.10 
Conditionality: prior actions, compliance and completion rates 

(2013-18) 

Sample 

SBA 

EFF 

Precautionary 

Non 
Precautionary 

Euro Area 

Non Euro Area 

Exceptional 
Access 

Normal Access 

Debt 
Restructuring 

Non Debt 
Restructuring 

Average no. of 
PAs by 
completed 
review 

Compliance with conditionality (% total 
conditions) 

Program completion rates (% total 
programs) 

Met Partially 
or with Delay  Delayed 

Not Met or 
Delayed 

Completed 
most reviews 

Off-track 
mid-program 

Quickly 
off track 

Met 

2.8  74.8 

3.2  70.7 

1.1  69.9 

3.5  73.0 

1.2  54.3 

3.1  73.0 

8.5  62.8 

2.4  73.5 

11.7 

15.2 

10.7 

14.7 

40.0 

12.9 

20.3 

13.1 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

13.5 

14.1 

19.4 

12.3 

5.7 

14.1 

11.5 

13.5 

53.9 

83.3 

66.7 

72.0 

100.0 

70.0 

50.0 

74.1 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

46.2 

16.7 

33.3 

28.0 

0.0 

30.0 

50.0 

25.9 

5.2  73.7 

17.4 

0.0 

8.9 

60.0 

0.0 

40.0 

2.5  72.0 

13.1 

0.0 

14.9 

73.1 

0.0 

26.9 

ECB Occasional Paper Series No 235 / October 2019 

76 

 
 
 
 
Chart A.11 
Programmes in euro area and non-euro area countries (2008-18) 

(percentage total) 

PA
QPC
SPC

SB
IT

a) Average number of conditions by completed 
review

b) Conditionality: type of conditions

12

10

8

6

4

2

0

100

80

60

40

20

0

Euro area

Non-euro area

Euro area

Non-euro area

(percentage total) 

Fiscal 
Financial 

Central bank
Other

c) Conditionality: policy area

d) Average number of PAs by completed review

100

80

60

40

20

0

4

3

2

1

0

Euro area

Non-euro area

Euro area

Non-euro area

(percentage total) 

(percentage total) 

Met
Met partially or with delay

Delayed
Not met

Completed most reviews
Off-track mid-program
Quickly off track

e) Compliance rates

f) Program completion rates

100

80

60

40

20

0

100

80

60

40

20

0

Euro area

Non-euro area

Euro area

Non-euro area

ECB Occasional Paper Series No 235 / October 2019 

77 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chart A.12 
Stand-By Arrangements (SBA) and Extended Fund Facilities (EFF) (2008-18) 

(percentage total) 

PA
QPC
SPC

SB
IT

a) Average number of conditions by completed 
review

b) Conditionality: type of conditions

12

10

8

6

4

2

0

100

80

60

40

20

0

SBA

EFF

SBA

EFF

(percentage total) 

Fiscal
Financial

Central bank
Other

c) Conditionality: policy area

d) Average number of PAs by completed review

100

80

60

40

20

0

3

2

1

0

SBA

EFF

SBA

EFF

(percentage total) 

(percentage total) 

Met
Met partially or with delay

Delayed
Not met

Completed most reviews
Off-track mid-program
Quickly off track

e) Compliance rates

f) Program completion rates

100

80

60

40

20

0

100

90

80

70

60

50

40

30

20

10

0

SBA

EFF

SBA

EFF

ECB Occasional Paper Series No 235 / October 2019 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chart A.13 
Exceptional access and normal access programmes (2008-18) 

(percentage total) 

PA
QPC
SPC

SB
IT

a) Average number of conditions by completed 
review

b) Conditionality: type of condition 

12

10

8

6

4

2

0

100

80

60

40

20

0

Exceptional access

Nomal access

Exceptional access

Normal access

(percentage total) 

Fiscal
Financial 

Central bank
Other

c) Conditionality: policy area

d) Average number of PAs by completed review

100

80

60

40

20

0

4

3

2

1

0

Exceptional access

Normal access

Exceptional access

Normal access

(percentage total) 

(percentage total) 

Met
Met partially or with delay

Delayed
Not met

Completed most reviews
Off-track mid-program
Quickly off track

e) Compliance rates

f) Program completion rates

100

80

60

40

20

0

100

90

80

70

60

50

40

30

20

10

0

Exceptional access

Normal access

Exceptional access

Normal access

ECB Occasional Paper Series No 235 / October 2019 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chart A.14 
Precautionary and non-precautionary programmes (2008-18) 

(percentage total) 

PA
QPC
SPC

SB
IT

a) Average number of conditions by completed 
review

b) Conditionality: type of conditions

12

10

8

6

4

2

0

100

80

60

40

20

0

Precautionary

Non-precautionary

Precautionary

Non-precautionary

(percentage total) 

Fiscal 
Financial

Central bank
Other

c) Conditionality: policy area

d) Average number of PAs by completed review

100

80

60

40

20

0

3

2

1

0

Precautionary

Non-precautionary

Precautionary

Non-precautionary

(percentage total) 

(percentage total) 

Met
Met partially or with delay

Delayed
Not met

Completed most reviews
Off-track mid-program
Quickly off track

e) Compliance rates

f) Program completion rates

100

80

60

40

20

0

100

80

60

40

20

0

Precautionary

Non-precautionary

Precautionary

Non-precautionary

ECB Occasional Paper Series No 235 / October 2019 

80 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chart A.15 
Programmes with and without debt restructuring (2008-18) 

(percentage total) 

PA
QPC
SPC

SB
IT

a) Average number of conditions by completed 
review

b) Conditionality: type of conditions 

12

10

8

6

4

2

0

100

80

60

40

20

0

Debt restructuring

Non-debt restructuring

Debt restructuring

Non-debt restructuring

(percentage total) 

Fiscal
Financial

Central bank
Other

c) Conditionality: policy area

d) Average number of PAs by completed review

100

80

60

40

20

0

4

3

2

1

0

Debt restructuring

Non-debt restructuring

Debt restructuring

Non-debt restructuring

(percentage total) 

(percentage total) 

Met
Met partially or with delay

Delayed
Not met

Completed most reviews
Off-track mid-program
Quickly off track

e) Compliance rates

f) Program completion rates

100

80

60

40

20

0

100

90

80

70

60

50

40

30

20

10

0

Debt restructuring

Non-debt restructuring

Debt restructuring

Non-debt restructuring

ECB Occasional Paper Series No 235 / October 2019 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annex 3: List of programmes: 2008-18 

Country 

Arrangement Type 

Start Date 

End Date 

Access GDP (%)  Access Quota (%)  Precautionary 

Exceptional Access  Off Track  Debt Restructuring  Successor 

Albania 

Angola 

Antigua and Barbuda 

Argentina 

Armenia 

Armenia 

Armenia 

Barbados 

Belarus 

Bosnia and Herzegovina 

Bosnia and Herzegovina 

Bosnia and Herzegovina 

Costa Rica 

Cote d'Ivoire 

Cyprus 

Dominican republic 

Egypt 

El Salvador 

El Salvador 

Gabon 

Georgia 

Georgia 

Georgia 

EFF 

SBA 

SBA 

SBA 

SBA 

28/02/2014  27/02/2017 

23/11/2009  30/03/2012 

07/06/2010  06/06/2013 

20/06/2018  19/06/2021 

06/03/2009  29/03/2010 

ECF-EFF 

28/06/2010  27/09/2013 

EFF 

EFF 

SBA 

SBA 

SBA 

EFF 

SBA 

07/03/2014  31/08/2017 

01/10/2018  30/09/2022 

12/01/2009  11/04/2010 

08/07/2009  07/07/2012 

26/09/2012  30/06/2015 

07/09/2016  06/09/2020 

11/04/2009  10/07/2010 

ECF-EFF 

12/12/2016  11/12/2019 

EFF 

SBA 

EFF 

SBA 

SBA 

EFF 

SBA 

15/05/2013  22/01/2016 

09/11/2009  08/03/2012 

11/11/2016 

10/11/2019 

16/01/2009  16/01/2009 

17/03/2010  16/03/2013 

19/06/2017  18/06/2020 

15/09/2008  14/06/2011 

SBA-SCF 

11/04/2012  10/04/2014 

SBA 

30/07/2014  19/12/2014 

1.5 

0.8 

4.6 

5.2 

2.7 

1.9 

0.5 

2.8 

2.0 

3.7 

1.3 

1.9 

1.0 

1.0 

2.4 

1.4 

1.9 

1.9 

1.8 

2.2 

2.4 

1.0 

0.4 

492.37 

300.00 

600.00 

1110.00 

400.00 

290.00 

89.36 

220.11 

418.77 

600.00 

200.00 

167.06 

300.00 

75.00 

563.21 

500.00 

422.00 

300.00 

300.00 

215.00 

317.43 

166.33 

66.53 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

0 

0 

Y 

Y 

0 

0 

Y 

0 

0 

0 

0 

Y 

Y 

0 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

0 

0 

Y 

0 

Y 

0 

0 

0 

0 

0 

Y 

0 

0 

0 

0 

Y 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

Y 

0 

0 

0 

Y 

Y 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

Y 

Y 

ECB Occasional Paper Series No 235 / October 2019 

82 

 
 
 
Country 

Arrangement Type 

Start Date 

End Date 

Access GDP (%)  Access Quota (%)  Precautionary 

Exceptional Access  Off Track  Debt Restructuring  Successor 

Georgia 

Greece 

Greece 

Guatemala 

Honduras 

Honduras 

Honduras 

Hungary 

Iceland 

Iraq 

Iraq 

Ireland 

Jamaica 

Jamaica 

Jamaica 

Jordan 

Jordan 

Kenya 

Kenya 

Kosovo, Republic of 

Kosovo, Republic of 

Kosovo, Republic of 

Latvia 

Maldives 

Moldova 

Moldova 

Mongolia 

Mongolia 

Pakistan 

EFF 

SBA 

EFF 

SBA 

SBA 

12/04/2017  11/04/2020 

09/05/2010  05/12/2011 

15/03/2012  14/03/2016 

22/04/2009  21/10/2010 

07/04/2008  30/03/2009 

SBA-SCF 

01/10/2010  31/03/2012 

SBA-SCF 

03/12/2014  02/12/2017 

SBA 

SBA 

SBA 

SBA 

EFF 

SBA 

EFF 

SBA 

SBA 

EFF 

06/11/2008  05/10/2010 

19/11/2008 

31/08/2011 

24/02/2010  23/02/2013 

07/07/2016  06/07/2019 

16/12/2010  15/12/2013 

04/02/2010  03/05/2012 

01/05/2013  16/09/2016 

11/11/2016 

10/11/2019 

03/08/2012  02/08/2015 

24/08/2016  23/08/2019 

SBA-SCF 

02/02/2015  14/03/2016 

SBA-SCF 

14/03/2016  13/09/2018 

SBA 

SBA 

SBA 

SBA 

21/07/2010  20/01/2012 

27/04/2012  26/12/2013 

29/07/2015  04/08/2017 

23/12/2008  22/12/2011 

SBA-ESF 

04/12/2009  03/12/2012 

ECF-EFF 

29/01/2010  30/04/2013 

ECF-EFF 

07/11/2016 

06/11/2019 

SBA 

EFF 

SBA 

01/04/2009  01/10/2010 

24/05/2017  23/05/2020 

24/11/2008 

30/09/2011 

1.0 

5.7 

6.3 

1.1 

0.2 

0.5 

0.5 

4.3 

5.1 

1.1 

1.7 

5.7 

4.0 

2.8 

6.3 

2.9 

1.0 

0.5 

1.1 

1.0 

0.9 

1.7 

2.8 

1.6 

3.5 

1.2 

2.1 

2.0 

2.0 

100.00 

3211.77 

2158.77 

300.00 

30.00 

100.00 

100.00 

1014.78 

1190.48 

200.00 

230.26 

2321.78 

300.00 

225.00 

312.17 

800.00 

150.00 

180.00 

196.00 

157.05 

154.19 

250.00 

1200.02 

700.00 

300.00 

75.01 

300.00 

435.01 

500.00 

0 

0 

0 

Y 

Y 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

Y 

0 

0 

0 

0 

Y 

Y 

0 

0 

Y 

0 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

Y 

0 

0 

0 

0 

Y 

Y 

0 

Y 

Y 

0 

Y 

Y 

0 

0 

0 

Y 

Y 

0 

Y 

0 

0 

0 

Y 

0 

Y 

Y 

0 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

Y 

Y 

0 

Y 

Y 

0 

0 

0 

0 

0 

0 

Y 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

0 

Y 

0 

0 

Y 

0 

0 

0 

0 

0 

0 

0 

Y 

Y 

0 

Y 

0 

Y 

0 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

ECB Occasional Paper Series No 235 / October 2019 

83 

 
 
Country 

Arrangement Type 

Start Date 

End Date 

Access GDP (%)  Access Quota (%)  Precautionary 

Exceptional Access  Off Track  Debt Restructuring  Successor 

Pakistan 

Portugal 

Romania 

Romania 

Romania 

Serbia, Republic of 

Serbia, Republic of 

Serbia, Republic of 

Seychelles 

Seychelles 

Seychelles 

Sri Lanka 

Sri Lanka 

St. Kitts and Nevis 

Suriname 

Tunisia 

Tunisia 

Ukraine 

Ukraine 

Ukraine 

Ukraine 

EFF 

EFF 

SBA 

SBA 

SBA 

SBA 

SBA 

SBA 

SBA 

EFF 

EFF 

SBA 

EFF 

SBA 

SBA 

SBA 

EFF 

SBA 

SBA 

SBA 

EFF 

04/09/2013  30/09/2016 

20/05/2011  30/06/2014 

04/05/2009  25/03/2011 

31/03/2011  30/06/2013 

27/09/2013  26/09/2015 

16/01/2009  15/04/2011 

29/09/2011  28/03/2013 

23/02/2015  22/02/2018 

14/11/2008  18/12/2009 

23/12/2009  22/12/2013 

04/06/2014  03/06/2017 

24/07/2009  23/07/2012 

03/06/2016  02/06/2019 

27/07/2011  03/08/2012 

27/05/2016  16/04/2017 

07/06/2013  31/12/2015 

20/05/2016  19/05/2020 

05/11/2008  28/07/2009 

28/07/2010  27/12/2012 

30/04/2014  29/08/2014 

11/03/2015  10/03/2019 

1.2 

6.3 

4.2 

1.1 

0.6 

0.5 

1.3 

1.8 

1.2 

1.5 

0.6 

2.2 

1.0 

4.5 

7.8 

1.6 

3.6 

3.8 

4.8 

5.7 

9.8 

424.98 

2305.72 

1110.76 

300.00 

170.00 

75.00 

200.00 

200.00 

200.00 

225.00 

104.95 

400.00 

185.00 

590.00 

265.32 

400.00 

375.21 

801.75 

728.86 

800.00 

900.00 

0 

0 

0 

Y 

Y 

0 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

Y 

Y 

Y 

0 

0 

0 

0 

Y 

0 

Y 

0 

Y 

0 

0 

0 

0 

0 

Y 

0 

0 

Y 

Y 

Y 

Y 

0 

0 

0 

0 

0 

0 

0 

0 

Y 

Y 

0 

0 

0 

Y 

0 

0 

0 

0 

0 

Y 

Y 

Y 

0 

0 

Y 

Y 

0 

Y 

Y 

0 

Y 

Y 

0 

0 

0 

0 

0 

Y 

0 

Y 

Y 

Y 

ECB Occasional Paper Series No 235 / October 2019 

84 

 
 
 
 
Annex 4: Data sources and variables 

A 

Variables on programme conditionality 

Sources: MONA database; Scheubel, Tafuro and Vonessen (2017); Scheubel and 
Stracca (2016). 

Programme types 

• 

• 

• 

• 

• 

SBA = Stand-By Arrangements 

EFF = Extended Fund Facilities 

Blended: 

• 

• 

• 

“SBA-SCF”: SBA- Stand-By Credit Facility 

“SBA-ESF”: SBA- Exogenous Shocks Facility 

"ECF-EFF": Extended Credit Facility – EFF 

Exceptional access = programmes the approved amounts of which exceed 
“normal” IMF lending limits, considered on a cumulative basis (300% of quota 
before 2009; 600% of quota during 2009-16; and 435% of quota since 2016). 

Precautionary = SBAs approved on a precautionary basis – i.e. authorities do not 
intend to draw on resources. 

•  Off-track = programmes finalised or interrupted with less than half of the 

scheduled reviews completed. 

•  Quickly Off-Track = programmes completed with a total number of reviews below 

2. 

Single = programmes without any successors 

First programmes followed by good/bad successors = programmes followed by a 
successor of “good” or “bad” type. 

• 

• 

•  Good successors = successor arrangements approved within two years of their 
predecessor that are either precautionary or low access (annualised amount of 
less than one-quarter of the annual access limit, following IMF definition). 

• 

Bad successors = drawing successor arrangement approved within two years of 
their predecessor above one-quarter of the annual access limit (following IMF 
definition). 

ECB Occasional Paper Series No 235 / October 2019 

85 

 
 
Programme size 

• 

• 

Size (% GDP) = Approved amount at the beginning of the programme/GDP in 
year of approval 

Size (% quota) = Approved amount at the beginning of the programme/quota in 
year of approval 

Average conditions by review: Total number of conditions imposed during the 
entire life of a programme divided by the number of completed reviews. 

Ownership: Total number of prior actions (PA) imposed during the entire life of a 
programme divided by the number of completed reviews. 

Policy areas: Share of conditions in each of the following areas in total conditions: 

• 

• 

• 

Fiscal = General government + civil service and public employment reforms, and 
wages + pension and other social sector reforms + public enterprise reform and 
(non-financial sector) pricing; 

Financial = financial sector; 

Central bank = central bank + exchange systems and restrictions; 

•  Other = international trade policy (excluding customs reforms); labour markets 
(excluding public sector employment); economic statistics (excluding fiscal and 
central bank transparency); and other structural measures. 

• 

• 

• 

• 

Programme completion rates: Share of programmes in each category in total 
number of programmes: 

Programmes that completed most reviews = programmes which completed half 
or more of their scheduled reviews; 

Programmes that went off-track mid-term = programmes which completed more 
than two but less than half of scheduled reviews; 

Programmes that went quickly off-track = programmes which completed less 
than two reviews. 

Compliance with conditionality: Share of conditions in each category in total 
conditions (PA are eliminated as they are always “met”): 

Met = met on time 
Partially or with delay = partially met + met with delay 
Not met or delayed = not met, cancelled, waived or delayed. 

ECB Occasional Paper Series No 235 / October 2019 

86 

 
 
B 

Variables on macroeconomic outcomes 

Economic growth/Real GDP: Percentage change in gross domestic product 
measured in constant prices. Source: IMF World Economic Outlook Database, 
October 2018. 

Current account balance: Current account balance as percent of GDP. Source: IMF 
World Economic Outlook Database, October 2018. 

Gross public debt: General government gross debt as a percentage of GDP. 
Source: IMF World Economic Outlook Database, October 2018. 

Primary balance: General government primary net lending/borrowing as a 
percentage of GDP. Source: IMF World Economic Outlook Database, October 2018. 

Consumer Price Index: End of period percentage change in consumer prices. 
Source: IMF World Economic Outlook Database, October 2018. 

Official reserves: Official foreign exchange reserves in months of imports. Source: 
World Development Indicators. 

Net private capital inflows: Net private capital inflows as a percentage of GDP. 
Source: IMF b.o.p. statistics. 

ECB Occasional Paper Series No 235 / October 2019 

87 

 
 
List of acronyms 

AE 

AOA 

b.o.p. 

CCL 

DSA 

EC 

ECB 

EFF 

EFSF 

EME 

ESM 

EU 

EXA 

FCL 

FFA 

GRA 

IMF 

IEO 

IT 

LOI 

MAC 

MFA 

MOU 

NGOs 

PLL 

PA 

PRGT 

QPC 

RGA 

ROC 

ROSC 

SB 

SBA 

SCIMF 

SPC 

Advanced economy 

Articles of Agreement 

Balance of Payments 

Contingent Credit Line 

Debt Sustainability Analysis 

European Commission 

European Central Bank 

Extended Fund Facility   

European Financial Stability Facility 

Emerging market economy 

European Stability Mechanism 

European Union 

Exceptional Access 

Flexible Credit Line 

Financial Assistance Facility Agreement 

General Resources Account 

International Monetary Fund 

Independent Evaluation Office 

Indicative Targets 

Letter of intent 

Market Access Country 

EU Macrofinancial Assistance 

Memorandum of Understanding 

Non-governmental organisation 

Precautionary Liquidity Line 

Prior action 

Poverty Reduction and Growth Trust 

Quantitative performance criteria 

Regular Access 

Review of Conditionality and Programme Design 

Report on the Observance of Standards and Codes 

Structural Benchmark 

Stand-By Arrangement 

EU Sub-Committee on IMF and related issues   

Structural Performance Criteria 

ECB Occasional Paper Series No 235 / October 2019 

88 

 
 
 
 
 
Task Force members 

Co-Chairs 

Marco Committeri 
Banca d´Ítalia, Rome, Italy; email: marco.committeri@bancaditalia.it 

Pilar L´Hotellerie-Fallois 
Banco de España, Madrid, Spain; email: plhotellerie@bde.es 

Members 

Monica Algarra 
Banque de France, Paris, France; email: monica.algarra@banque-france.fr 

Irina Balteanu 
European Central Bank, Frankfurt am Main, Germany; email: irina.balteanu@ecb.europa.eu 

Carlijn Eijking 
De Nederlandsche Bank, Amsterdam, The Netherlands; email: c.h.m.eijking@dnb.nl 

Julia Estefanía 
Banco de España, Madrid, Spain; email: julia.estefania@bde.es 

Sonsoles Gallego 
Banco de España, Madrid, Spain; email: sonsoles.gallego@bde.es 

Serena Garelli 
Banque centrale du Luxembourg, Luxembourg, Luxembourg; email: serena.garelli@bcl.lu 

Heather Gibson 
Bank of Greece, Athens, Greece; email: hgibson@bankofgreece.gr 

Robert Heinbuecher 
Deutsche Bundesbank, Frankfurt am Main, Germany; email: robert.heinbuecher@bundesbank.de 

Caroline Janssens 
Banque Nationale de Belgique, Brussels, Belgium; email: c.janssens@nbb.be 

Tobias Krahnke 
Deutsche Bundesbank, Frankfurt am Main, Germany; email: tobias.krahnke@bundesbank.de 

Christina Lerner 
Oesterreichische Nationalbank, Vienna, Austria; email: christina.lerner@oenb.at 

Michelle O’Donnell Keating 
Central Bank of Ireland, Dublin, Ireland; email: michelle.odonnell.keating@centralbank.ie 

Xavier Serra 
Banco de España, Madrid, Spain; email: xserra@bde.es 

Alessandro Schiavone 
Banca d´Ítalia, Rome, Italy; email: alessandro.schiavone@bancaditalia.it 

Luc Stevens 
Banque Nationale de Belgique, Brussels, Belgium; email: l.stevens@nbb.be 

Melina Vasardani 
Bank of Greece, Athens, Greece; email: imvasardani@bankofgreece.gr 

Benjamin Vonessen 
European Central Bank, Frankfurt am Main, Germany; email: benjamin.vonessen@ecb.europa.eu 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
© European Central Bank, 2019 

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ISBN 978-92-899-3876-1, ISSN 1725-6534, doi:10.2866/835281, QB-AQ-19-018-EN-N