Policy Papers

This note elaborates on the operational implications of the key principles that should guide the Fund in designing and setting conditionality and the 2002 conditionality guidelines. It is not intended as a comprehensive stand-alone guidance note, but rather as an aid to the implementation of the new guidelines. The operational issues covered are grouped into three areas: (i) the process of negotiation and program design; (ii) the design of conditionality; and (iii) the presentation of conditionality in Board papers for the use of Fund resources. The 2008 revisions arise from the Board-endorsed recommendations of the IEO evaluation of structural conditionality; the Board’s preferred way forward is to strengthen efforts to achieve parsimony by emphasizing criticality as well as requiring rigorous justification of conditionality.