Discussion on Conditionality of IMF Loans from the Persepctive of Differenct IPE Theories

Critically discuss conditionality of IMF loans from the perspective of different IPE theories.

There are three IPE (international political economy) that includes, economic national perspective, liberal national perspective and critical perspective. These theories are used to analyze global political economy.

Economic national perspective.

Economic national perspective strains the importance of the states national interest and understanding actions in global perspective. This perspective is a state- centered theory, thus, it focus mainly on states own interest.

Further more, this theory dates back on to the rise and extension nation states in Europe in 15th century. Nevertheless, “mercantilist believed that there was a limited amount of capital in the world and that every nation must focus on its own interest by restricting trade with other nations”.

Moreover, this called as “zero-sum game”. “One nations win is another nations loss”. Two well-known devotees of the mercantilist approach were Alexander Hamilton and Fredrick list. “List argued that Germany should industrialize through trade barriers, in order to reach the great economy in the United Kingdom”.

Nevertheless, there are also some developed countries that use this approach for a specific reason for instance; the United States used this theory on a specific division. Such as protecting it’s aerospace industry.
Thus, there are key actors in economic national perspective; the state is the main actor in international political economy. Therefore, this theory focuses on states rather than individuals (O’Brien and Williams 2013 p.9).

However, there are two main statements of this approach, one is that the inter-state system is radical and thus it’s the obligation ...

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...nomic difficulties. Countries must solve their economic difficulties in way that it would not affect international economy. Thus, countries should repay the loans plus interest and funds provided by IMF should be used as in the agreements and rules of IMF.

Nevertheless, there are different methods that a country must accept before getting financial support from the IMF such prior actions, quantitative performance criteria, indicative targets and structural benchmarks. First, prior actions are procedures that a nation accepts to achieve before IMF’s approval to financial support. For instance, official agreement of the budget to the programs. Second, quantitative performance criteria are special conditions that need to be fulfilled to complete the analysis. Third, indicative targets are expended to enhancement the QPC’s (quantitative performance criteria)