## Reform of the Policy on Public Debt Limits in Fund-Supported Programs

_Policy Papers, November 14, 2014_

## Source details

**Canonical URL:** [Reform of the Policy on Public Debt Limits in Fund-Supported Programs](https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/reform-of-the-policy-on-public-debt-limits-in-fund-supported-programs-pp4926)

## Other formats

- [Markdown version](/en/publications/policy-papers/issues/2016/12/31/reform-of-the-policy-on-public-debt-limits-in-fund-supported-programs-pp4926/index.md)
- [Structured JSON version](/en/publications/policy-papers/issues/2016/12/31/reform-of-the-policy-on-public-debt-limits-in-fund-supported-programs-pp4926/index.json)
- [Bundle manifest](/en/publications/policy-papers/issues/2016/12/31/reform-of-the-policy-on-public-debt-limits-in-fund-supported-programs-pp4926/bundle-manifest.json)

## Bibliographic details
- Published: November 14, 2014
- Series: Policy Papers

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### Overview and Rationale
- The reform addresses the Fund’s policy on the use of conditionality on public external debt in Fund-supported programs (the “debt limits policy”).
- Discussion of the reform has been ongoing since March 2013.
- Motivation: lower income countries seek higher public investment to close large infrastructure gaps while facing a wider range of external financing opportunities and limits on the supply of traditional concessional financing.
- The 2009 reform of the Fund’s policy on debt conditionality was a first step; experience with the 2009 reforms pointed to the need for more fundamental reforms to provide countries greater flexibility to finance productive investments while containing risks to medium-term debt sustainability.

### Reform Process and Consultations
- The proposed reforms build on:
  - Board review of the debt limits policy in March 2013,
  - Informal Board discussions in January and May 2014,
  - An informal seminar in September 2014,
  - Various stakeholder consultations.
- Staff’s development approach:
  - First specify a robust set of principles to guide the use of public debt conditionality in all Fund arrangements.
  - Then examine how these principles should apply in the specific circumstances of countries that normally rely on official external concessional financing.

### Objectives and Scope
- Primary objective: provide countries with greater flexibility to finance productive investments while containing risks to medium-term debt sustainability.
- Scope includes application of principles across all Fund arrangements and particular attention to low-income countries that rely on concessional external financing.

### Publication Details and Subjects
- Publication date: November 14, 2014
- Subjects: Concessional aid, Conditionality, External debt, Fund policies, Fund-supported adjustment programs, Low-income developing countries, Public debt
- Availability note: Also Available in French

*International Monetary Fund — Reform of the Policy on Public Debt Limits in Fund-Supported Programs (November 14, 2014).*

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## Content in this bundle

- **Reform of the Policy on Public Debt Limits in Fund-Supported Programs; December 19, 2014**
  - [Reform of the Policy on Public Debt Limits in Fund-Supported Programs; December 19, 2014 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2014/_111414.pdf.md){rel="alternate" type="text/markdown"}
  - [Reform of the Policy on Public Debt Limits in Fund-Supported Programs; December 19, 2014 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2014/_111414.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/policy-papers/issues/2016/12/31/reform-of-the-policy-on-public-debt-limits-in-fund-supported-programs-pp4926_