Limits on streamlining Fund conditionality: the International Monetary Fund's organizational culture

Abstract

The International Monetary Fund (IMF) recently started addressing its ‘runaway agency’ image by instituting top-down directives to streamline, or limit the scope and breadth of, conditionality. Under the leadership of a new Managing Director in 2000, the IMF attempted to change its guidelines on conditionality to address members' concerns that Fund staff had encroached on members' economic sovereignty. After some internally proposed steps to change conditionality, the new guidelines that were ideally designed to allow flexibility in designing conditionality — explicitly for member-states and implicitly for Fund staff — resembled the existing means of formulating conditionality. The reason for the continued status quo is that the Fund's organizational culture, qualified as technocratic, resisted policy changes and instead invited a continued mission creep. Based on published internal Fund studies and personal interviews with Fund staff, this article suggests that internal efforts to change conditionality have had a minimal effect on changing the status quo due to the Fund's entrenched organizational culture.