{
  "title": "Vested Interests in a Positive Theory of IFI Conditionality",
  "publication": "IMF Working Papers, April 1, 2002",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/vested-interests-in-a-positive-theory-of-ifi-conditionality-15776",
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  "summary": "Understanding of the domestic political environment is key to building broad country ownership and the successful implementation of reform programs supported by international financial institutions (IFIs).",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Understanding of the domestic political environment is key to building broad country ownership and the successful implementation of reform programs supported by international financial institutions (IFIs).\n- Recipient countries are not unitary actors: policymakers are influenced by special interest groups (SIGs) opposing reforms, leading to distorted policies.\n- Using a new model of the financial relations between a benevolent IFI and a sovereign borrower subject to influence by SIGs, the paper analyzes the determinants and welfare impacts of conditional and unconditional assistance.\n- While conditionality may raise IFI welfare, economize on the amount of assistance, and lower domestic distortions, it may not always raise recipient country welfare.\n- Recipient governments are always better off if assistance is provided unconditionally."
    },
    {
      "heading": "Key findings and analysis",
      "content": "- Conditionality effects:\n  - May raise IFI welfare.\n  - May economize on the amount of assistance.\n  - May lower domestic distortions caused by SIG influence.\n  - May not always raise recipient country welfare.\n- Recipient government welfare:\n  - Recipient governments are always better off if assistance is provided unconditionally.\n- Analytical approach:\n  - Employs a model of financial relations between a benevolent IFI and a sovereign borrower influenced by special interest groups (SIGs).\n\n---\n\n Content in this bundle\n\n- Vested Interests in a Positive Theory of IFI Conditionality - WP/02/73\n  - Vested Interests in a Positive Theory of IFI Conditionality - WP/02/73 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Vested Interests in a Positive Theory of IFI Conditionality - WP/02/73 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/vested-interests-in-a-positive-theory-of-ifi-conditionality-15776"
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    "Authors: Alex Mourmouras, Wolfgang Mayer",
    "Published: April 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451849479.001",
    "Understanding of the domestic political environment is key to building broad country ownership and the successful implementation of reform programs supported by international financial institutions (IFIs).",
    "Recipient countries are not unitary actors: policymakers are influenced by special interest groups (SIGs) opposing reforms, leading to distorted policies.",
    "Using a new model of the financial relations between a benevolent IFI and a sovereign borrower subject to influence by SIGs, the paper analyzes the determinants and welfare impacts of conditional and unconditional assistance.",
    "While conditionality may raise IFI welfare, economize on the amount of assistance, and lower domestic distortions, it may not always raise recipient country welfare.",
    "Recipient governments are always better off if assistance is provided unconditionally.",
    "Conditionality effects:",
    "Recipient government welfare:",
    "Analytical approach:",
    "**Vested Interests in a Positive Theory of IFI Conditionality - WP/02/73**"
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