The IMF often requires countries that borrow from it to introduce policies that privatize government-owned industries such as telecommunications and power generation. This is an example of:
A)a balance of payments constraint.
B)conditionality.
C)limited capital account convertibility.
D)infrastructure investment.

Question

Quizplus · Accepted Answer

Conditionality refers to the use of conditions attached to the provision of benefits such as loans, debt relief, or financial aid. In the context of the IMF, conditionality involves the implementation of policy measures by a borrowing country in order to meet specific goals, such as privatizing state-owned enterprises, to ensure the country's ability to repay the IMF loans.

The IMF Often Requires Countries That Borrow from It to Introduce