Law Commons^™

International Monetary Fund Conditionality And Options For Aggrieved Fund Members, Brian Trubitt

Vanderbilt Journal of Transnational Law

The International Monetary Fund (the IMF or the Fund) was created to assist in stabilizing rates of currency exchange. Each country is able to achieve stability only by balancing the amount of local currency flowing out against the amount of foreign currency flowing in. When exchange rates are stable, capital can flow more easily to places where it can be most efficiently utilized, thus raising the worldwide level of prosperity.

Unfortunately, the process of adjustment from imbalance to balance entails some sacrifices. A country with an imbalance must eliminate the excess of imports over exports. The IMF has the power …