Is Conditionality For Loans From International Financial Institutions A Legitimate Way To Influence National Policies?

Year 2013, Volume: 6 Issue: 2, 187 - 208, 01.06.2013

Devran Ünlü

Abstract

The globalization of the international financial system continues rapidly. In the second part of the twentieth century, a new era started in the development of intergovernmental fiscal organizations with the foundation of the International Monetary Fund (hereinafter IMF) and the World Bank (hereinafter WB). Today, these international financial institutions (hereinafter IFI) play an indispensable role in the new globalized financial order. Day by day, the growing influence of the IFI has increased the number of disputes on this issue. One of the controversial issues is the conditionality policies of the IFI, and their relationship with democracy. Although it is alleged that conditionality is beneficial for the improvement of democracy, it seems that it is inimical to development of democracy. This essay will investigate whether these conditionality policies are legitimate ways to affect national policies.

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