Policy Ownership and Aid Conditionality in the Light of the Financial Crisis

A Critical Review

image of Policy Ownership and Aid Conditionality in the Light of the Financial Crisis

The current economic situation has obliged the international donor community to reexamine its stance on the conditionality of development assistance. This study evaluates which controversies persist with respect to aid conditionality, how successful donors have been in stemming the rising tide of aid conditionality of the 1980s and 1990s, and whether the donor community practices what it preaches regarding the allocation of aid based on governance and development criteria. Above all, the report considers how the financial crisis has rendered it increasingly difficult to maintain traditional conditionality frameworks. Strategies for reducing the number of aid conditionalities and for enhancing recipient ownership of aid policies are proposed in light of the unsustainability of existing frameworks.

English Also available in: French


A Brief Review of Some Empirical Studies of Conditionality's Impact

OECD Development Centre

Much, though not all, of the empirical literature on the impact on conditionality covers IMF programmes, for straightforward reasons: the conditionality associated with these programmes is the most long-standing, and data are more readily available. Since the 1990s, the IMF itself has provided data on compliance with its programme conditionality, through its database on Monitoring Fund Arrangements (MONA)1. The empirical studies on the impact of conditionality have two different strands. A large literature admirably summarised by Dreher (2008) tries to determine the extent to which recipients have complied with conditionality. This literature generally concludes that compliance is lax (see, inter alia, Mecagni, 1999 and Edwards, 2001). The second strand looks at the impacts of compliance on economic policy and outcomes.

English Also available in: French

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