The Legal Scope of IMF Conditionality: Empirical Analysis of the Case of Colombia 1999 -2006
| Autor | Liliana Lizarazo Rodríguez |
| Cargo | Lawyer and specialist in Financial Law of the Universidad del Rosario |
| Páginas | 2-42 |
T L S IMF C
E A C C
L L R1
U G
Abstract
The term conditionality refers to the economic
policies suggested or imposed by the IMF to
countries that will use its resources, in accor-
dance with the Articles of the Agreement. This
paper analyzes the legal scope of IMF conditio-
nality and the level of accomplishment of struc-
tural reforms in Colombia, i.e. whether the case
of Colombia corresponds to the general trends
of compliance with IMF conditionality worldwi-
de, as presented in previous studies, or not. The
empirical analysis refers to three consecutive
arrangements covering the period 1999-2006:
(i) an Extended Fund Facility ((EFF); Dec 1999-
2004); a Stand-by arrangement (2002-4), and
Nov.2006).
Keywords conditionality, International Mone-
tary Fund, IMF, structural reforms, compliance,
soft law, Colombia, structural adjustment.
Resumen
políticas económicas sugeridas o impuestas por
el Fondo Monetario Inernacional (FMI) a países
que van a utilizar sus recursos de acuerdo con
el Convenio Constitutivo de FMI. Este artículo
analiza el alcance jurídico de la condicionalidad
del FMI y el nivel de cumplimiento en materia
de reformas estructurales en Colombia, es de-
corresponde con las tendencias generales de
cumplimiento con la condicionalidad del FMI a
nivel mundial, presentadas en estudios previos.
El analisis empírico se basa en tres acuerdos
durante el periodo 1999-2006: (i) Un Acuerdo
Extendido (Dec 1999-2004); un Acuerdo de De-
recho de Giro (Stand-by arrangement) (2002-4),
Palabras clave Condicionalidad, Fondo Mone-
tario Internacional, FMI, reformas estructurales,
Colombia, “soft law”, ajuste estructural.
1 Lawyer and specialist in Financial Law of the Universidad del Rosario; specialist in Development Policies and Master
in Public Administration of the University of Antwerp (Belgium); PhD Researcher at the University of Ghent (Belgium);
Independent Consultant.
Sumario
I I IMF CONDITIONALITY A LITERATURE REVIEW A T IMF B
T IMF C S D T
IMF E T IMF F T
G C IMF - III THE CASE OF COLOMBIA A T
C IMF B E IMF T E F F A-
D D T S A T S
C IMF C R CR III. CONCLUSIONS: MACROECONOMIC GOALS AND
STRUCTURAL REFORMS R
L L R
Julio - Diciembre de 2011 - Universidad de los Andes - Facultad de Derecho - Revista de Derecho Público N.o 27
4
I
The term conditionality refers to the economic
policies suggested or imposed by the IMF to
countries that will use its resources, in accor-
dance with the Articles of the Agreement (Gold
1979:1 quoted by Sorel 1996:47). The conditio-
nality of IMF loans to developing countries has
political instrument. However, for the IMF, condi-
tionality seeks to safeguard the character of the
fund’s resources and to promote the achieve-
ment of program objectives, particularly, a viable
zoom in on the normative scope of conditionality
in the arrangements with the IMF. An in-depth
case study of Colombia will therefore be presen-
ted. This country entered in three consecutive
arrangements covering the period 1999-2006:
an Extended Fund Facility (EFF; Dec 1999-
2004); and two Stand-by arrangements (2002-
paper is not purely legalistic but it also contains
an empirical part based on IMF sources.
I IM F CO NDI TIO NALITY
A LI TER ATURE REVIEW
A T IMF
A core issue has been the political character of
the relations between the IMF and borrowing
countries which has been described at leng-
th (Swedberg 1986) and often criticized. Most
analysts see the IMF thereby as an active pla-
yer, but while some emphasize its autonomy as
a bureaucracy, others emphasize that the IMF
acts as an agent of its major stakeholders (Bird
span that countries spend in IMF programs,
which has lengthened over the recent decades,
depends on economic and political variables.
However, not all empirical studies support the
of political variables in economic models (Bird
and Rowlands 2001; Bird 2007).
The political proximity between (potential) reci-
pients of IMF support, on the one hand, and the
on the other, matter for the access to and the
modalities of the support. Momani (2004) tes-
ted the claim of a technocratic and independent
and loan conditionality. The hypothesis was
that when the conditions are repeatedly unac-
complished, political intervention increases
(Momani 2004:880-1). The process of appro-
val of conditions is defended by former mem-
bers of the IMF, arguing that the process seeks
to avoid political intromission (Gold 1977:46-4;
Southard 1979; Stiles 1991, quoted by Momani
2004:884). However, evidence was found that:
(i) many loans have been directed to countries
that largely unaccomplished IMF conditionality;
(ii) the executive board does not approve all the
credits; (iii) a small number of countries has a
large voting majority inside the board (Momani
the US, on both the loan approval and the de-
sign of conditionality was observed; even more,
some arrangements are lenient and approved
against the recommendations of IMF staff based
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