Country ownership of reform programmes and the implications for conditionality

This paper explores conditions for the elimination of traditional conditionality and the possibility for doing so in the context of ensuring country ownership of reform programmes. It argues that if the policies voluntarily adopted by a country are sound and if those policies are expected to be fully implemented and sustained then traditional conditionality is not necessary for timely repayment of the money borrowed from the IMF, World Bank, or any other creditor.

This paper finds:

• ownership matters because of the expectation that program design will be superior and that the country authorities will be resolute in taking the appropriate steps, especially domestic legitimation, to ensure full implementation of the programme - this is supported by available evidence
• ex ante selectivity is easily made preferable to ex post, and for financial support a recipient country must satisfy the donor country team as to the reality of ownership, soundness of the programme, and adequate implementation capacity
• if the approach is adhered to, there would be self-interest in the recipient countries in implementing and sustaining sound policies and there would be self-interest within the aid-giving organisations to insist on sound policies and satisfactory outcomes as a condition for future aid.