The International Monetary Fund`s conditionality and the current financial crises: A comparative study of International Monetary Fund’s conditionality during the 2008-2012 financial crises in Iceland and Ireland
Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
The essay compares and discusses IMF ´s conditional loan programs during the financial crisis in Iceland and Ireland during 2008-2012. The principal aim of this essay is to investigate and analyze what decides variation in IMF`s conditional loan programs. The chosen method is a most similar system design comparison between Iceland and Ireland. The essay depart from a theoretical approach which focus on IMF`s staff as working autonomously when designing conditional loan programs to borrowing countries.
The differences in IMF`s conditionality and the decisions to select such conditions has been studied through analyses of secondary material and primary sources such as IMF`s statements and by data measurement of IMF`s major shareholders banking exposure to Iceland and Ireland. Comparison between Iceland and Ireland indicates that the IMF developed a more flexible approach in Iceland where IMF showed tolerance for “heterodox” policies such as capital controls and fiscal discipline with less preference for austerity, and supported the Icelandic government in letting their banks default, whereas in Ireland the IMF adopted the traditional “orthodox” response and demanded austerity measures in a combination with the often criticized structural conditions. The study concludes that the Irish case shows evidence that supports the arguments that the IMF`s major shareholders can influence IMF`s conditionality when their interests are at stake, and the Iceland`s case shows that IMF`s staff is given greater autonomy when major shareholders lack interests in the program country.
Place, publisher, year, edition, pages
2012. , 44 p.
IMF, Conditionality, Iceland, Ireland.
IdentifiersURN: urn:nbn:se:su:diva-89456OAI: oai:DiVA.org:su-89456DiVA: diva2:618028
UppsokSocial and Behavioural Science, Law