These gaps between rhetoric and practice in the IMF’s lending activities reveal an escalating commitment to hypocrisy.
- Alexander Kentikelenis
A new study, the largest of its kind, has systematically examined International Monetary Fund (IMF) policies over the past three decades. It found that – despite claims to have reformed their practices following the global financial crisis – the IMF has in fact ramped up the number of conditions imposed on borrower nations to pre-crisis levels.
The crisis revived a flagging IMF in 2009, and the organisation has since approved some of its largest loans to countries in economic trouble. At the same time, IMF rhetoric changed dramatically. The ‘structural adjustment programs’ of austerity and privatisation were seemingly replaced with talk of the perils of inequality and the importance of social protection.
Researchers from the University of Cambridge’s Department of Sociology collected archival material on the IMF’s lending operations and identified all policy conditions in loan agreements between 1985 and 2014 – extracting 55,465 conditions across 131 countries in total.
They found that structural adjustment conditions increased by 61% between 2008 and 2014, and reached a level similar to the pre-crisis period.
The authors of the study, which used newly-available data and is published in the Review of International Political Economy, say their findings show that the IMF has surreptitiously returned to the practices it claims it has abandoned: encroaching on the policy space of elected governments by enforcing free market reforms as conditions of lending. This is despite the IMF Managing Director Christine Lagarde rejecting concerns over the return of structural adjustment: “We do not do that anymore”*.
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Image:Russian President Medvedev meets with Christine Lagarde, Managing Director of International Monetary Fund
Credit: Mikhail Klimentyev
Reproduced courtesy of the University of Cambridge
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