Editing International Monetary Fund (section)

===Conditionality===
{{See also|Debt-trap diplomacy|Neocolonialism}}
The IMF has been criticised for being "out of touch" with local economic conditions, cultures, and environments in the countries they are requiring policy reform.<ref name="Jensen 2004, April, Issue 48" /> The economic advice the IMF gives might not always take into consideration the difference between what spending means on paper and how it is felt by citizens.<ref name="The End of Poverty">{{cite book |last1=Sachs |first1=Jeffrey |title=The End of Poverty |url=https://archive.org/details/endofpovertyecon00sach |url-access=registration |year=2005 |publisher=The Penguin Press |location=New York |isbn=9781594200458 }}</ref> Countries charge that with excessive conditionality, they do not "own" the programmes and the links are broken between a recipient country's people, its government, and the goals being pursued by the IMF.<ref>{{Citation |last1=Boughton |first1=James M. |chapter=Whose programme is it? Policy ownership and conditional lending |pages=[https://archive.org/details/imfitscriticsref0000unse/page/225 225–253] |publisher=Cambridge University Press |isbn=9780511493362 |last2=Mourmouras |first2=Alex |doi=10.1017/cbo9780511493362.010 |title=The IMF and its Critics |year=2004 |chapter-url=https://archive.org/details/imfitscriticsref0000unse/page/225 }}</ref>

[[Jeffrey Sachs]] argues that the IMF's "usual prescription is 'budgetary belt tightening to countries who are much too poor to own belts{{' "}}.<ref name="The End of Poverty" /> Sachs wrote that the IMF's role as a generalist institution specialising in macroeconomic issues needs reform. [[Conditionality]] has also been criticised because a country can pledge collateral of "acceptable assets" to obtain waivers—if one assumes that all countries are able to provide "acceptable collateral".<ref name="IMF Conditionality and Country Ownership of Programs" />

One view is that conditionality undermines domestic political institutions.<ref>{{cite book |last1=Stiglitz |first1=Joseph E. |title=Making Globalization Work |year=2006 |publisher=Allen Lane: an imprint of the Penguin Group |location=Great Britain }}</ref> The recipient governments are sacrificing policy autonomy in exchange for funds, which can lead to public resentment of the local leadership for accepting and enforcing the IMF conditions. Political instability can result from more leadership turnover as political leaders are replaced in electoral backlashes.<ref name="Jensen 2004, April, Issue 48" /> IMF conditions are often criticised for reducing government services, thus increasing unemployment.<ref name="chorev"/>

Another criticism is that IMF policies are only designed to address poor governance, excessive government spending, excessive government intervention in markets, and too much state ownership.<ref name="The End of Poverty" /> This assumes that this narrow range of issues represents the only possible problems; everything is standardised and differing contexts are ignored.<ref name="The End of Poverty" /> A country may also be compelled to accept conditions it would not normally accept had they not been in a financial crisis in need of assistance.<ref name="An Analysis of IMF Conditionality"/>

On top of that, regardless of what methodologies and data sets used, it comes to same the conclusion of exacerbating income inequality. With [[Gini coefficient]], it became clear that countries with IMF policies face increased income inequality.<ref name="The distributional effects of IMF program">{{cite book |last1=Garuda |first1=Gopal |title=The distributional effects of IMF program |year=1998 |publisher=The Harvard university |location=Cambridge }}</ref>

It is claimed that [[conditionalities]] hinder social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programmes lead to an increase in poverty in recipient countries.<ref name=Hertz>Hertz, [[Noreena]]. ''The Debt Threat''. New York: [[Harper Collins Publishers]], 2004.</ref> The IMF sometimes advocates "[[Austerity|austerity programmes]]", cutting public spending and increasing taxes even when the economy is weak, to bring budgets closer to a balance, thus reducing [[budget deficit]]s. Countries are often advised to lower their corporate tax rate. In ''[[Globalization and Its Discontents]]'', [[Joseph E. Stiglitz]], former chief economist and senior vice-president at the [[World Bank]], criticises these policies.<ref name=Stiglitz>Stiglitz, Joseph. ''Globalization and its Discontents''. New York: WW Norton & Company, 2002.</ref> He argues that by converting to a more [[monetarist]] approach, the purpose of the fund is no longer valid, as it was designed to provide funds for countries to carry out [[Keynesian]] reflations, and that the IMF "was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community."<ref>{{cite magazine |author=Benjamin M. Friedman |url=http://www.nybooks.com/articles/15630 |title=Globalization: Stiglitz's Case |magazine=The New York Review of Books |date=15 August 2002 |access-date=30 May 2010 |archive-date=13 December 2007 |archive-url=https://web.archive.org/web/20071213160910/http://www.nybooks.com/articles/15630 |url-status=live }}</ref>

Stiglitz concludes, "Modern high-tech warfare is designed to remove physical contact: dropping bombs from 50,000 feet ensures that one does not 'feel' what one does. Modern economic management is similar: from one's luxury hotel, one can callously impose policies about which one would think twice if one knew the people whose lives one was destroying."<ref name=Stiglitz/>

The researchers [[Éric Toussaint|Eric Toussaint]] and Damien Millet argue that the IMF's policies amount to a new form of colonisation that does not need a military presence: 
{{blockquote|Following the exigencies of the governments of the richest companies, the IMF, permitted countries in crisis to borrow in order to avoid default on their repayments. Caught in the debt's downward spiral, developing countries soon had no other recourse than to take on new debt in order to repay the old debt. Before providing them with new loans, at higher interest rates, future leaders asked the IMF, to intervene with the guarantee of ulterior reimbursement, asking for a signed agreement with the said countries. The IMF thus agreed to restart the flow of the 'finance pump' on condition that the concerned countries first use this money to reimburse banks and other private lenders, while restructuring their economy at the IMF's discretion: these were the famous conditionalities, detailed in the Structural Adjustment Programmes. The IMF and its ultra-liberal experts took control of the borrowing countries' economic policies. A new form of colonisation was thus instituted. It was not even necessary to establish an administrative or military presence; the debt alone maintained this new form of submission.<ref>{{cite book |last=Toussaint and Millet |title=Debt, The IMF, and The world Bank |year=2010 |publisher=Monthly Review Press U.S. |pages=83 }}</ref>}}

International politics play an important role in IMF decision making. The clout of member states is roughly proportional to its contribution to IMF finances. The United States has the greatest number of votes and therefore wields the most influence. Domestic politics often come into play, with politicians in developing countries using conditionality to gain leverage over the opposition to influence policy.<ref name="IMF: Politics of Conditional Lending">{{cite book |last1=Vreeland |first1=James |title=The International Monetary Fund (IMF): Politics of Conditional Lending |year=2007 |publisher=Taylor & Francis Books UK |location=UK }}</ref><ref>{{Cite web |last=Julien Reynaud and Julien Vauday |date=November 2008 |title=IMF lending and geopolitics |url=https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp965.pdf |website=ecb.europa.edu |archive-url=https://web.archive.org/web/20090608225536/https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp965.pdf |archive-date=8 June 2009 |url-status=live }}</ref>

Academic Jeremy Garlick cites IMF loans to South Korea during the [[1997 Asian financial crisis]] as widely perceived by the South Korean public as a debt-trap.<ref name=":13">{{Cite book |last=Garlick |first=Jeremy |title=Advantage China: Agent of Change in an Era of Global Disruption |date=2024 |publisher=[[Bloomsbury Academic]] |isbn=978-1-350-25231-8 }}</ref>{{Rp|page=89}} Garlick writes that the public was generally bitter about submitting to the conditions imposed by the IMF, which required South Korea to radically restructure its economy and consult with the IMF before making economic decisions until the debt was repaid.<ref name=":13" />{{Rp|page=89}}

In 2016, the IMF's research department published a report titled "Neoliberalism: Oversold?" which, while praising some aspects of the "[[neoliberal]] agenda", claims that the organisation has been "overselling" fiscal [[austerity]] policies and financial deregulation, which they claim has exacerbated both financial crises and [[economic inequality]] around the world.<ref>{{cite web |last=Rowden |first=Rick |date=6 July 2016 |title=The IMF Confronts Its N-Word |url=https://foreignpolicy.com/2016/07/06/the-imf-confronts-its-n-word-neoliberalism/ |access-date=22 October 2016 |website=Foreign Policy |archive-date=4 November 2020 |archive-url=https://web.archive.org/web/20201104040658/https://foreignpolicy.com/2016/07/06/the-imf-confronts-its-n-word-neoliberalism/ |url-status=live }}</ref><ref>[https://time.com/4356816/neoliberalism-imf-globalization/ Globalization's True Believers Are Having Second Thoughts] . ''[[Time (magazine)|Time]]'', 3 June 2016</ref><ref>[http://www.businessinsider.com/imf-neoliberalism-warnings-2016-5 IMF: The last generation of economic policies may have been a complete failure] {{Webarchive |url=https://web.archive.org/web/20201007023122/https://www.businessinsider.com/imf-neoliberalism-warnings-2016-5 |date=7 October 2020 }}. ''Business Insider'', May 2016.</ref>

In 2020 and 2021, Oxfam criticized the IMF for forcing tough austerity measures on many low income countries during the COVID-19 pandemic, despite forcing cuts to healthcare spending, would hamper the recipient's response to the pandemic.<ref>{{cite web |date=19 April 2022 |title=IMF must abandon demands for austerity as cost-of-living crisis drives up hunger and poverty worldwide |url=https://www.oxfam.org/en/press-releases/imf-must-abandon-demands-austerity-cost-living-crisis-drives-hunger-and-poverty |access-date=13 October 2023 |website=Oxfam International |archive-date=15 October 2023 |archive-url=https://web.archive.org/web/20231015084633/https://www.oxfam.org/en/press-releases/imf-must-abandon-demands-austerity-cost-living-crisis-drives-hunger-and-poverty |url-status=live }}</ref><ref>{{cite web |date=12 October 2020 |title=Over 80 per cent of IMF Covid-19 loans will push austerity on poor countries - World {{!}} ReliefWeb |url=https://reliefweb.int/report/world/over-80-cent-imf-covid-19-loans-will-push-austerity-poor-countries |access-date=13 October 2023 |website=reliefweb.int |archive-date=15 October 2020 |archive-url=https://web.archive.org/web/20201015020304/https://reliefweb.int/report/world/over-80-cent-imf-covid-19-loans-will-push-austerity-poor-countries |url-status=live }}</ref>