Theoretical and Empirical Study of Effectiveness of IMF Conditionality in the Economic Reconstruction of the Philippines : Assessment of IMF Conditionality for Asian Crisis

2000 Fiscal Year Final Research Report Summary

• Project/Area Number: 11630052
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Single-year Grants
• Section: 一般
• Research Field: 経済政策(含経済事情)
• Research Institution: Osaka City University
• Principal Investigator: MORISAWA Keiko Osaka City University Institute of Economic Research Professor, 経済研究所, 教授 (60137180)
• Project Period (FY): 1999 – 2000
• Keywords: Asian Currency Crisis / The Philippines / IMF / Conditionality / External Debt Crisis / Economic Reconstruction / ASEAN / Asian Economic Crisis

Research Abstract

Countries seriously damaged by the Asian Crisis in 1997 such as Thailand, Malaysia, Indonesia and Korea had rapidly begun to restore their economies from mid- 1999. However, the recovery becomes to be weakened and the structural reforms seem to delay since the end of 2000. Supported by IMF, the countries except Malaysia had implemented the reforms, however, they shifted their stance for boosting their economies rather than reform since the early 2001. In Thailand there was a change of government, in Korea and Indonesia there are more and more movements to criticize the governments as well. The reforms directed by IMF are usually implemented struggling with the bested interest of political and economic powers in each country. The conditionality of IMF has to be implemented through the political power balance and to be encountered with many impediments, as the Philippines' experiences showed in 1980s.
This study examines the effectiveness of IMF conditionality for Asian Crisis, based on t he author's study of IMF conditionality for the reconstruction of the Philippine economy in the framework of political economy. First of all, the author indicates that (1) the damage of Asian Crisis was relatively slighter in the Philippines partly due to the financial reform such as tightening prudential regulation and the central bank reform (2) however on the other hand, the IMF tightening policies failed to boost the Philippine economy for a long time. Secondly, among the many factors for the Philippine economic stagnation more than ten-years, there are two important factors : (1) the friction between IMF for radical structural reform and the domestic economic and political powers, and (2) the political instable process from collapse of Marcos regime to the birth of Aquino Government, and these were closely connected to IMF conditionality. It will be more important to analyze the impacts of IMF conditionality through the political economy when we will consider how the Asian countries will recover from the Crisis hereafter.