Conditionality in extreme circumstances: the IMF and emergency financing during the COVID-19 pandemic

The article highlights the shift in lending policy towards instruments without ex post conditionality by the International Monetary Fund (IMF) amid the COVID-19 pandemic in 2020. The objectives of the article are two-fold: Firstly, it aims to clearly indicate the shift of IMF lending policy towards instruments without conditionality in 2020; secondly, it complements the existing academic literature on changes in conditionality by testing three factors that contribute to the shift. It is concluded that similarly to the global financial crisis in 2008, more discretion was given to IMF staff to rapidly respond to the crisis and that the IMF staff increased the Fund's power position in the global financial safety net through expanded lending. A novelty around the COVID-19 crisis is the change in the normative debate around conditionality, which intensified in the years before the pandemic, suggesting that a more permanent change in IMF conditionality policy is taking shape.