1 | P a g e
HOW INTERNATIONAL FINANCIAL INSTITUTIONS AFFECT THE
POLICIES OF DEVELOPING COUNTRIES
I. IMF's Role in Economic Reforms
A. Structural adjustment programs
The structural adjustment policies have been the center of controversy regarding the IMF‟s
impact on; the decisions of nations in the developing world. These programs, which are targeted
on the macroeconomic fluctuations, have significantly influenced the economical patterns of a
great deal of countries. Those in support of the structural adjustments stress the need for such
changes for sound development of economy. In their article, Kentikelenis et al. (2016) have
stressed that such programs tend to lead to the achievement of better fiscal restraint and better
resource allocation. This view shows the possibility of; advantages of making an application of
strict monetarist approaches in making their economies more stable and development-oriented.
Critics have, however, pointed out that the IMF methods can at times been rigid and the solutions
offered do not take into account the respective country‟s circumstances. Structural adjustment
reforms have at some time worsened environmental conditions in developing nations especially
as far as the needy folks are concerned this is the view of Stiglitz (2002). The strict adherence to
these programs may lead to the following negative effects since its formulation does not take into
consideration the unique circumstances of each country in terms of social and economic status.
For instance, the IMF‟s recommendations for market-opening policies and privatization have
been accused of negativities that would erode domestic industries and/or social protection (Babb
& Kentikelenis, 2018). Such policy outcomes can entail eradication of employment
opportunities, decreased availability of public services and growing social gap that in turn
augments the pressure on the existing economic and social structure of developing states.
However, there are other researches, which showed some positive effects of the IMF-
recommended structural adjustments. According to similar reforms, the countries apply in their
respective economies; the long run economic growth rates are higher. This implies that in a
certain circumstances structural adjustment program can be a positive force for the growth and
development of a country‟s economy. The effects of these programs presented both positive and
negative scenarios, showing the thorough need to give due consideration to every country when
formulating the necessary economic policies and reforms that should be implemented, but would
be beneficial and just at the same time. These examinations advancing the analysis of structural
adjustment programs, exemplify that; the interaction between, the international financial
institutions and the policy space of developing nations is multifaceted, as well as highly
polarized. The goal of these programs is to strengthen and enhance the stability of the economic
aspects, yet when implementing them, awareness should be paid to the fact that the needs of the
developing countries vary. This balancing act between; revenue accumulation and protection of
the nation‟s vulnerable, is critical in attaining sustainable development. Therefore, constant
2 | P a g e
discussions and critical evaluations of these programs are useful in; enhancing their utility and
promoting their operations as beneficial to the states of developmental countries.
B. Conditionality of loans
The fact that IMF credits have always been issued with certain conditions became; one of the key
tenets of the organization‟s operations aimed at, affecting the economic policies of the
developing countries. In this practice, one intertwines loans with policy changes in such a way
that recipients have to adopt policies that make budget cuts, open up markets, or change civil
service agencies. Detractors claim that the principle of conditionality guarantees, accountability
and accountability for the funds while; facilitating reforms that may be crucial for the recipient‟s
economy. The author Dreher (2009) has shown empirical evidence proving that countries, which
stick to the policy imposed by IMF, enjoy better economic results and the rate of crisis
occurrences in the future. This viewpoint means that conditionality can help; create more
favorable economic transformations for encouraging sensible fiscal and monetary policies of
nations for, stabilizing economic condition for their respective countries‟ progression. Though,
critics argue that loan conditionality is a form of intervention on national sovereignty and that
may result in having policies that are not suitable for the given nation. For an example,
Kentikelenis et al. (2016) points that while conditionality has been successful in establishing
strict measures, studies show that increased stringency has associated with decreased public
spending on services, that are deemed socially important; therefore, possibly worsening social
inequality. For instance, measures such as the rebalancing always lead to the scaling down of
spending on health, education, and welfare with a knock-on effect of falling on the vulnerable.
This can erode social capital and thus have worst effects to human dependency in both the short
and long run. Even the efficiency of conditionality has raised the question. For example,
Reinhart and Trebesch (2016) observed that loans with IMF conditionality tend to be associated
with countries‟ repeat borrowing and therefore, the intended reforms may not have positive
impacts on economic development. This is a situation described as the “IMF dependency trap”
meaning that despite conditionality looking to solve short-term balance of payment difficulties; it
does not offer the structural reforms that are required for sustainable economic recovery.
However, the countries may be inclined to remain always growing their dependence on external
help, which will lead to cyclic external debt. Some people still consider conditionality as a kind
of drawback but what will surprise them is the fact that the implementation of conditionality has
become more flexible and country sensitive. Grabel (2011) reports that lately, the IMF has been
more receptive to context-specificity thus possibly managing to reduce on the negative effects of
the standardization approach. This shift can be seen as a reflection of the IMF‟s recognition of
the heterogeneity of the economic and social environments in which Fund programs were being
applied, which affords greater complex and relevant suggestions.
C. Fiscal policy recommendations
A large number of IMF policies and measures directed towards issuing recommendations
regarding fiscal policy affecting the member state‟s economy have a marked influence on the
3 | P a g e
strategies adopted by developing states; typically, those include the encouragement of the
reduction of deficits and proper budgetary management. Such recommendations often suggest
that; actions like cutting expenditure, lifting the taxes and rehabilitating the debts should be
taken. They contend that such policies are necessary for; the stability of the macroeconomic
environment and economic development. Thus, as Gupta et al. (2018) state, it becomes possible
to note that with the help of IMF-recommended fiscal reforms, the credit rating of the source
country rises as well as the inflow of foreign investment. This point of view implies that
embracing strict policies of the use of fiscal measures leads to improvement of the economic
environment that in the end fosters the investment and improvement of the state of the financial
merits. But the critics state that such policies may result to decrease in government expenditure
on crucial sectors such as provision of health and education enhancing the shift of social
inequalities. Ortiz & Cummins (2019) revealed that the austerity measures suggested by the IMF
in developing nations have often led to the attainment of funding for social services and state
employment and in some cases harming the vulnerable groups. This critique focuses on; social
implications of prudential budgeting where key operations are cut in order to meet the set goals
leaving the marginalized people. The declining public spending threatens to daunt progress
towards better health, education, human development thus perpetuating poverty and inequality.
The debate is also common regarding the time and the pace at which such adjustments should be
done. As for the measures, the IMF commonly calls for the rapid adoption of reforms, but Ostry
et al. , (2016) propose a slower approach and consider that countries in an economic crisis should
be especially careful. They recommend that premature application of the austerity measures
stokes recessions that lead to higher levels of unemployment and social distance. Perhaps the
more moderate approach to the process of fiscal consolidation might help certain countries to
stabilize their economies and minimize social costs of the processes that are taking place.
Nonetheless, critics have raised the following concerns about the IMF‟s fiscal policy advice;
latest studies, for instance, Bal Gündüz (2016) avow that it has lately become more pragmatic in
the fiscal policy advice it proactively considers global sensitive features and social effects. This
evolution shows a departure from the previous „slash and burn‟ approach to development hence
an attempt to adopt an endogenous approach to development which will respect country
conditions and balance revenue collection with sustainable social and economic development.
However, the government cannot just rely on IMF‟s advice to make sound decisions; thus,
incorporating factors such as the social impact and economic status enables the promotion of
sustainable development objectives.
D. Monetary policy influence
Discussions on the IMF‟s role on the monetary policies in developing countries have been
severally done with regard to inflation, exchange rate, and financial sector. The institution
usually supports the kind of monetary policies that are suited for goal of keeping inflation rates
low and stabilizing the economy. As Eichengreen and Woods claim, the utilization of the IMF
recommended monetary policies results in the decrease in inflation rates and an increase in the
independence of the central bank in developing countries. Such an approach brings out; the
4 | P a g e
IMF‟s core values of sound price and institutional structure, a factor that supports stable banking
and monetary systems, hence, economic stability. However, the critics have said that the IMF
way of operation is very rigid, which can in fact hamper the economic growth and put restriction
on the policies adopted for tackling internal economic issues. According to Rey (2015), there are
issues in the implementation of monetary policies influenced by the IMF; particularly, he notes
that such policies do not consider the phase and structure of financial cycles in developing
countries adequately. For instance, severe measures to dismantle inflation may thus hinder the
economy‟s growth and limit employment opportunities, which in turn may worsen poverty and
unfairness. Also, a focus in the literature on central bank independence is useful in principle but
in practice it may sometimes limit the capacity of national governments for accommodating
crises. The debate also includes; variables related to exchange rate policies of the IMF. However,
some authors, as Ghosh et al (2017) stated, the flexible exchange rate system which is a favorite
of the institution does not always work perfectly for the developing nations. Fluctuations of
currencies can be random and have negative effects on certain economies especially those, which
have no adequate institutional environment to maintain stability of the fluctuations. On the other
hand, fixed or what is otherwise referred to as the managed exchange rate regimes might provide
more stability within monetary policy with the disadvantage of limited independence.
Nevertheless, the subsequent research indicates that the IMF‟s advice on monetary policy, at
least to the emerging market economies, appears to have evolved from the crude austerity. Adler
et al. (2020) referred that in some cases, the institution has recently been paying much attention
to the capital flow management measures that indicates that it has been adopting a rather more
unconventional approach to monetary policy advice in developing countries. This change
suggests a; development of awareness inside IMF on the all-encompassing and dynamic
structures that, shape and drive the development and economies of the emergent nations.
II. World Bank's Development Initiatives
A. Poverty reduction strategies
Exploring factors that contribute to; poverty across its various dimensions has been one of the
key components of the World Bank‟s development policies. The goal of these strategies is;
usually the achievement of specific improvements, through the provision of focused activities,
changes in policies and legal frameworks as well as the strengthening of institutional capacity.
Advocates claim that due to the World Bank approach, global poverty reduction has been
boosted greatly. Chen and Ravallion (2013) mentioned that the countries which are participating
in the poverty reduction programs formulated by the World Bank has witnessed a much sharper
fall in the poverty rates at the bottom end. This points to the effectiveness of the structured
assistance in development of; economical security and enhanced standards of living. However,
there is a criticism in regard to the Bank‟s strategies the main argument of which is that the goal
of economic growth does not necessarily guarantee fair distribution of resources. According to
Hickel (2017) the World Bank approach to development in its focus on the GDP masks perpetual
5 | P a g e
poverty and ecological deterioration. This critique gives worry to growth when it does not lead to
the welfare of everyone including the environment. While proponents of purely economic
growth argue that it is necessary to increase the economic indicators, critics underline that it can
cause failure to notice important social aspects and provide development results that will not
benefit all the people, but would benefit some of them more than others. The strategies employed
in poverty reduction have also been viewed in relation to its sustainability based on the
following; On the one hand, Ravallion (2016) emphasized the aspect of the Bank‟s approach to
providing specific evidence on poverty reduction However, Mosse (2010) notes that, with
reference to top-down interventions, it suggests that interventions fail to take into account the
local environment and existing power relations. Such an approach means that program objectives
may not always correspond to the needs of communities; therefore, restricting the effectiveness
of intervention. Nevertheless, that critics have said that the bank has not adopted adequate
participatory processes and focuses more on asserting its ownership in poverty reduction
Strategies, recent assessments William Beegle Christiaensen suggested that World Bank has
been improving on the application of participatory approaches and country ownership of poverty
reduction strategy maps in the recent past. It might also be attributed to the attempt aimed at
emboldening the local communities meaning poverty reduction strategies should be closer to the
target group needs and vocations. In order to improve on the outcomes of the World Bank‟s
intervention and address problems, such as those highlighted in this study, it is necessary to;
cultivate greater levels of collaborative support and local ownership of intervention efforts.
B. Infrastructure development projects
Infrastructural development projects implemented by the World Bank have influenced the
physiognomy and economic developments canvassing several developing countries. Such
projects typically involve; almost all areas of business, including; transport, energy, water, and
communication. Major supporters of foreign investments claim that, these are necessary to;
foster economic growth and enhance quality of life. Calderon and Serven (2014) affirmed that
development of infrastructure through the support of World Bank has boosted productivity and
reduced inequality in the context of developing countries. For instance, better transport
infrastructure means friendly markets and easy movement while power infrastructure allows
increased industrial and social service delivery. However, the opponents express concerns by; the
potential harm posed to the environment and society in large-scaled infrastructure projects.
Sovacool, Lannon, & Clark (2018) provide examples of such projects as sources of social and
environmental injustice including forced evictions of locals and environmental destruction.
These include deforestation, loss of mammals, fish and birds, pollution of seas, rivers, ponds and
lakes among other negative impacts. Also, people are forced to lose their occupations and
exhibit; cultural destabilization, triggering conflicts and socio-economic repercussions in the
long term. It has also been evaluated; whether these projects are feasible and sustainable in terms
of economics. While Estache and Garsous (2012) stress on the advantage of infrastructure
investment in catalyzing the private sector improvement as the spillover impact, there are
drawbacks that Flyvbjerg (2014) notes within the large infrastructures, including inflated costs
6 | P a g e
and under delivered benefits. Such financial imbalances, cause pressures on the affected national
budgets and higher levels of debt for the developing countries. Vulnerabilities arising from the
reliability of infrastructure projects, add issues with maintenance and operation to the
sustainability of the infrastructure projects, reducing the anticipated economic value-add. In the
last several years, sustainable infrastructure has emerged as a high priority area of interest for the
World Bank. According to Rozenberg and Fay (2019), while the Bank has for some time favored
large infrastructure projects, it has also concentrated on climate-resilient and low-carbon
approaches showing a tendency toward environmentally sustainable development. This change is
responding to the fact that; infrastructure is not only required for economic development but also
to sustain various climate change and other environmental aspects. The World Bank wants to
ensure that the sustainability of the projects carried out is taken into account in the planning and
execution of the projects so as to minimize negative effects caused on the environment or people
due to change in the infrastructure as well as maximize the positive impacts of change lasting for
a very long time. This preoccupation with sustainable development speaks to; the shifting
context that defines, not only the construction of infrastructure and development of economic
goods and services but also stewardship of the natural environment.
C. Education and health programs
The two sectors include education and health has been central to the World Bank‟s human
capital development in the developing nations. These measures‟ primary intent is to, enhance the
availability of quality education and health care; seeing them as critical antipoverty and
economic growth tools. Advocates of the Bank‟s interventions further argue that; the Bank has
made huge impact by, increasing education standards and health status indicators. In a nutshell,
Dutta and Husain (2019) have described that education initiatives funded by the World Bank
have resulted in raising school participation figures and enhanced rates of learning in numerous
upper-middle and lower-middle income countries across the globe. This is because such projects
have involved improvement in; the existing education facilities, training teachers, and supplying
them with teaching aids, thus increasing the pass rates of students and their retention rates.
According to Wagstaff et al. (2018) in the health sector of the Bank, the institution has supported
attempts to increase availability of essential health commodities and child mortality rates have
decreased. Examples of financed programs in the areas of health include construction and
renovation of health facilities, training of health profession and purchase of health commodities.
These have been cardinal in boosting the maternal health, disease control and the immunization
thus boosting public health worth. Nevertheless, critics claimed that the World Bank‟s
intervention in education and health can sometimes be; number-driven at the cost of quality and
inequalities of access. Klees (2017) argue that the Bank has played a role of advocating for
privatization and standardized testing in education which is likely to widen the education
inequalities. In focusing on a set performance standard and a measure of institutional
effectiveness, testing and school rankings subordinate important aspects of learning to other
things such as perusing academic excellence. Moreover, privatization measures may continue to
push the excluded needy beneficiaries out of school by making quality education available at a
7 | P a g e
fee through the private schools. Likewise, Tichenor and Sridhar (2017) lament the World Bank‟s
focus on market incentives as this may imperil public health systems. The enhancement of the
private healthcare providers and insurance schemes provides care to the poor segments of the
population though it may not be affordable to these segments. Such a market-oriented approach
might also; shift funds to experiments that detract from improving the health systems of the
societies, which is another critical factor for health equity.
D. Governance reform support
The support of governance reform as one of the aspects of the development policies has emerged
as one of the priorities in the activity of the World Bank due to understanding of the significance
of proper institutions and good governance for development. Although these programs are
normally geared towards commodities, they often cover such sectors as; public administration,
fighting corruption, or judiciary. It is claimed that such initiatives are crucial, in the quest of
ensuring that; an enabling environment for investment and poverty reduction is put in place. In
their view, Kaufmann and Kraay (2018) reveal that whenever countries embarked on governance
reforms supported by the World Bank there has been enhancement in government effectiveness
and the fight against corruption. Improve management of the public sector has increased delivery
of services, measures against corruption have reduced the vice hence making governance more
accountable. However critics say that the Bank‟s culture engaging governance reform can at
times be excessively methodological and/or might not address core political and social realities.
For example, Andrews (2013) insisted that most of the governance reforms introduced by the
World Bank are prone to fail because they barely address such issues as institutional contexts
and power relations. The technocratic approach is still ineffective, while explaining the realities
of; local governance, especially the spoilers and the NGO informal institutions. Thus, goals can
be declared and changed without any significant, lasting improvements being made. This can
also be deemed as an argument regarding the efficiency of the combating of corruption
initiatives. Thus, although Olken and Pande (2012) discuss some successes in fighting corruption
through specific measures, Marquette and Peiffer (2018) are skeptical about the idea that
lowering corruption has to actually result in better development performance. Many of them
complained that anti-corruption measures aim only at the manifestations of corruption and
suggested that corruption decrease does not necessarily result in enhanced economic or social
performance. Also, there are dilemmas that anti-corruption campaigns may be employed as
political tools to; target certain political opponents, which decrease their credibility. In the recent
past, the World Bank has refined interest on the political economy of reforms. Discussing the
specific developments in the Bank‟s approach in the last few years, Fritz et al. (2017) point out
to the new focus on adaptive modalities and problem-driven iterative learning in governance
reform, which may well respond to some of the issues concerning the critiques referring to the
lack of context-orientation and ownership. This shift toward more situation-specific approaches
is intended to promote the goal of sustainable reform as well as the goal of politically and socio-
culturally feasible reform.
8 | P a g e
III. Debt Management and Restructuring
A. Debt relief initiatives
Different debt relief campaigns that have been launched by the international financial institutions
have been vital in handling the debt problems of the developing nations. Others are programs
like the Heavily Indebted Poor Countries (HIPC) Initiative and Multilateral Debt Relief Initiative
(MDRI) whose goals are to ensure debt is brought to sustainable level to enable the countries
free resources for poverty alleviation. Aid enthusiasts appear to testify that debts relief has been
rather useful in enhancing fiscal affliction and support development. Cassimon et al. , (2015)
indicate that the countries that benefited from HIPC debt relief saw their social expenditure and
human development enhanced. Increased IFD promoted more funds spending on education,
health, and infrastructure in these countries that eventually raised development indicators and
poverty reduction. However, the critics argue that debt relief for instance is usually accompanied
by conditions that maybe inimical to policy space. According to Gunter et al (2018) it was noted
that conditionality that is normally placed on the debt relief negatively impacts on public
investment and consequently growth. Such conditions involve factors such as; structural
changes, adopting of the policies advocating for fiscal responsibility, and eradication of impulses
for new borrowings. Opponents of such measures say that such adjustments may slow overall
economic progress and development since the government will be encouraged to minimize
spending on goods and services as well as projects contributing to the societal overall
development. It has also been argued that the use of debt relief is also not sustainable in the long
run. Although Reinhart and Trebesch (2016) highlight relatively better economic performance
post-debt relief some of the nations‟ still experience debt sustainability problems. While there
were short-term benefits, in relation to fiscal discipline and new debts, some countries failed to
learn from experience and went through cycles of debt distress. This underlines the need to;
tackle preconditions in the field of „structural‟ economic weaknesses and to develop integrated
approaches toward dealing with public debts. However, more recent research points towards the
conclusion that debt relief programs were made more country-sensitivity for reasons which seem
to dispose of some of the above observations. These newer approaches stress specificity of; debt
relief programs that should be in line with each country‟s economic and social situation; to make
the processes as efficient and sustainable as possible. Because this evolution corresponds to a
changed perception of debt sustainability, as well as of the specificity of the tasks linked to
containing and developing the problems of debt, as calls for ever more comprehensive and
context-sensitive solutions to debt relief.
B. Sovereign debt restructuring mechanisms
Thus, mechanisms of sovereign debt restructuring have received much attention escalating as
crucial instruments in the arsenal of the IFIs to handle the debts crises in the developing
countries. The above mechanisms are intended to; offer guidance for restructuring sovereign debt
when a country cannot manage its debts. It is stated that the „such mechanisms are essential for
keeping the global financial system stable and avoiding excessively long debt crises‟. According
9 | P a g e
to Buchheit et al. , (2019), restructurings that are well structured will reach efficient results faster
than formal crisis resolution methodologies proving to be beneficial for both the debtor country
and the creditors. Through these mechanisms it becomes possible to regain sustainable external
indebtedness, stabilize an economy and create the prerequisites for renewed growth in the
indebted countries and for reduction of uncertainty and possible losses for the creditors. But,
there is something else that critics are worried the moral hazard linked to the debt re-profiling.
According to Gelpern (2016), the possibility of using restructuring tools may decrease the
reasons for sound credit and lending decision making. This realization often enables countries
and lenders to borrow recklessly since they believe that those debts can be restructured easily
without regard to the ensuing avenues that affect the long-term financial stability on the nations
involved. These two dimensions of moral hazard may cause; repeated episodes of credit boil and
debt crises, which can worsen economic risks. This also applies to mechanisms for regulating
relations with partners: their inclusion also raises questions. Some experts, including Bolton and
Jeanne (2007), believe that dealing with the problem requires a stricter regulation of debt
restructuring processes supported by legal means; whereas Bi et al. (2016) consider that more
„soft‟ approaches to managing the issue on the market level look more promising. Statutory
methods could have more certain rules with less legal and financial risks of restructuring for
companies. On the other hand, market-based solutions are more capable of providing solutions
that straightforward and deal with debtor‟s country and creditor‟s country problems to some
extent because it is much more flexible and contingent on negotiated solutions. This coupled
with the continually emerging mechanisms like G20‟s Common Framework for Debt Treatments
shows that progress continues to be made in the course of uploading the debt restructuring
processes. Although, Munevar (2021) has pointed out that these measures constitute some
progress towards addressing the problems within the realm of sovereign debt, problems still exist
in the general lack of fairness presented to all types of creditors and the increased intensity of
modern sovereign debt issues. The Common Framework is an initiative that seeks to incorporate
all stakeholders with creditors including private sector in order to try to work as one and address
the issue of debt relieve. Thus, the most massive challenges are still the need for consensus
between different stakeholders.
C. Sustainable debt management practices
Global credit institutions have in recent years attached paramount features to prudent debt
sustainability strategies in developing countries. They are normally associated with facets such
as; approaches to wise borrowing, realistic utilization of debt instruments and other features of
debt portfolio. Debt management is considered necessary for sustaining macroeconomic stability
and fostering sustainable development for which the following reasons are advocated. From
Melecky (2012) revelation, those countries that have embarked on sound DM frameworks have
associated it with cheaper borrowing costs as well as lower susceptibility to outside forces. They
assist in making borrowing of funds sustainable because the borrowing is in sync with the
country‟s capacity to repay the borrowed amount hence avoiding building up voluminous debts
and facilitate favorable investment climate. However, some learned argue that debt sustainability
10 | P a g e
aim sometimes causes extreme austerity measures in fiscal policies. According to Kentikelenis et
al. (2016), healthy policy instructions regarding debt sustainability put forward by the
international financial institutions can lead to cut in public expenditure on social services. Such
restrictive measures may; slow the process of development if they interfere with further
investments in socioeconomic sectors that require more funds, such as; healthcare, education,
and infrastructure; to enhance people‟s well-being and encourage further growth. The debate also
entails issues to do with; debt sustainable frameworks. Debrun et al. (2019) explain these
frameworks as central to policy-making, while a critic like Wyplosz (2011) panned for
employing long-term projections that are often ambiguous. DSA is always based on some
economic projections for the future, which may be quite uncertain and unreliable. This
inaccuracy may mean that; forecasts are „optimistic‟ or „pessimistic‟, which could in turn lead to;
the wrong recommendations regarding policy. Recent years have driven increased interest in the
issue of, finding more traditions of behavior concerning debt. Bonizzi et al. (2020) observed that
more focus has been given to country-specific characteristics and the structure of the debt to
analyze sustainability, which is a major shift from the previous literature regarding the
determination of sustainability in developing countries. To some extent, such trends can be
attributed to a shift away from the idea of the „one best system‟ which may not work for all
economic environments. Macroeconomic and structural factors clearly show that cohesion with
the global economies influences the countries in a definite way and thus, if required, efficient
debt management strategies could be cooked up with respect to the debt structure and external
exposure of each country to provide a sound solution which would pave the path for sustainable
paths.
D. Impact on national budgets
Through an analysis of the role played by and impact of international financial institutions
primarily the World Bank and the IMF, the onerous burdens of debt management and reform on
developing country budgets are elucidated. From a financial perspective, debt policies and
interventions can influence government; expenditure targets, available fiscal space, and country-
wide planning and forecasting. Those in support say that increased efficiency of the national debt
enables better resource allocation and results in higher levels of fiscal prudence due to the
assistance of international financial institutions. Presbitero (2016) asserts that when managing
debt portfolios well some countries receive higher credit ratings and reduced cost to borrow thus
leaving them with opportunities to fund developmental expenditures. Higher credit ratings help
to; attract foreign investment, boost economic growth, and bail out governments with increased
budgetary capacity to invest in priority sectors such as; education, health and other sections.
However, there are a number of critics, who argue that debt related policies may result to
decrease in social expenditure and investment. Debt management policies may contain fiscal
consolidation measures that may hence have adverse impacts on vulnerable groups, according to
Forster et al. (2019). Such measure usually entail the application of fiscal consolidation measures
that reduce social expenditure on basic goods and services to the poor, thereby worsening
inequalities and slowing the advancement in human development. This leads to attaining lower
11 | P a g e
standards of living as the reduction in social spending affects the availability of healthcare,
education and social protection. The same can also be referred seen in the context of its long
term effects on economic growth. For instance, Chudik et al. (2017) stated that high debt level
decreasing can provide positive impacts to the long-term growth while Pescatori et al. (2014)
could not identify a clear threshold at which debt would actually harm growth. Nonetheless,
these contradictory results of findings exposed the fact that; debt causality with economic growth
is not a straightforward process. Meaning it implies that the influences of debts may not be
similar for the growth of various countries but may be influenced by factors such as, economic
structure, governance, and the external economic context. New approaches, like Eyraud et al.
(2018), stress that the structure of the public spending and quality of fiscal re-balances are crucial
in evaluating the effects of debt related policies on the budgets and development trajectories of a
country. Precautions against; debt accumulation and its management should also involve,
assessing and monitoring the impact of fiscal adjustments on growth and inclusiveness of its
output. This approach calls for more, or at least, the retention of the budgetary fund to, or to
some, more strategic sectors that would encourage long-term development rather than stemming
towards the application of sound debt management policies.
IV. Trade Liberalization and Globalization
A. Promotion of free trade
Many institutions of global finance such as the IMF and the WTO have played a central role in
the globalization process with such countries encouraging the opening up of developing
countries to free trade by urging the elimination of trade barriers and encouraging these countries
to fully mainstream themselves into the emerging global trading system. Supporters‟ assert that
liberalization of trade promotes; economic progress and efficiency enhances quality of living. It
is argued that countries, which have opened up their borders to international trade through trade
liberalization, have realized higher GDP growth rates as well as lower poverty rates
Estevadeordal and Taylor (2013). Trade liberalization increases the economic welfare due to
efficiency of resources through specialization of production in a country. The World Trade
Organization (2019) that opens economy carries higher levels of innovation and productivity
since they import technology and intensified competition. Opening up the markets fosters the
growth of competition which presses the firms to adopt new technology and hence increases
productivity and economic development. Foreign competitors can also stimulate national
enterprises to; become more efficient and competitive and therefore inadvertently enhance the
development of the economy. Nonetheless, critiques argue that further liberalization of trade has,
negative impacts in the developing nations. According to Rodrik (2018), early integration into
world markets may cause jobless growth or deindustrialization in the nations of the second
world. Newly industrialized countries may not challenge the established industrialized countries
in the market through foreign direct investment hence leading to the collapse of the domestic
industries and loss of employment opportunities to the population. This may worsen income
12 | P a g e
distribution and offset the gains that could be achieved through the opening up of trade
opportunities. Free trade is not beyond controversy and this is because there are also amicable
differences on the distributional effect of free trade. Thus, although Dollar and Kraay (2004)
provide evidence that globalization is usually good for the poor, Goldberg and Pavcnik (2007)
describe situations when trade liberalization increases wage differentiation. Not all will benefit
from trade liberalization since the positive effects will be accrued to some specific groups,
namely the skilled workers as well as the industries that are more competitive to carry out
business operations the market.
B. Export-oriented growth strategies
Export oriented development strategies has become one of the elements of the policies of
development which are offered by the international financial institutions. These strategies are
generally cover policies designed at; raising export, through processes involving; devaluation of
currency, export incentives, and zones of export processing. Some of the benefits that people
advocate lock in with export-led growth comprising of economic development and
industrialization. Subsequent studies including Balassa (1978) indicate that nations, which adopt
export-promoting strategies, stand to benefit from higher rates of per capita income growth and
improvements in the export quality composition. Export orientation means that these countries
can target bigger overseas markets thus improving on scales of economies, earning more foreign
exchange and attracting FDI. It can help in; the diffusion of technology and skills that can help;
boost the process of industrialization of the economy. Nonetheless, the advocates of export-
oriented model have been criticized for creating economic imbalance according to the following
reasoning. Palley is of the view that export-led growth strategies may lead to low wages and poor
working environment because one country gains FDI and export market at the expense of
another. Competition is detrimental to the job creation and the worst of it is it leads to the
degradation of the labor laws and environmental standards thus not promoting sustainable
development. At the same time, depending on exports as the primary source of economic
development exposes the countries to the volatility of the global market, as well as to the global
fluctuations of demand and prices on commodities. It also covers; the durability of the export-led
development model as the core growth strategy. While Aggarwal and Zong (2006) show how the
East Asian economies thought exports for success, Felipe and Lim (2005) wonder if all
developing country can follow along, especially in a world where trade growth is slowing down.
The advanced economies of the East Asia region were primarily aided by suitable structural
global economic conditions and timely governmental interventions, which may not often be
feasible in other circumstances. Export led models, for many developing countries, may be
hampered by structural weaknesses including but not limited to; lack of industrialization and
infrastructure.
C. Foreign investment attraction policies
Multilateral organizations influencing globalization have advised developing countries to adopt
FDI strategies in their polices. It is often in the form of tax exemptions, special development
13 | P a g e
zones, and others reform measures. Advocates have also hinted that FDI bring funds and
technology as well as skills to the developing world. Using some indicators such as FDI stock
rate, human capital, and synchronized and lead variable, Alfaro et al. , (2004: 253) explain that,
indeed, the economic growth of countries with developed financial market is favored by FDI.
The positive effects include the provision of the required capital for the development of
infrastructure and expansion of industries besides transferring technology and efficient
managerial know-how in the host economy. Nevertheless, critics have tried to note that FDI‟s
advantages are slightly exaggerated and provide the negative effects such as the exploitation of
local resources and manpower. Lipsey and Sjöholm (2015) further note that through FDI,
benefits such as the positive externalities are not guaranteed, but are subject to some conditions
such as absorptive capacity. These indicated that for the anticipated benefits from FDI to be
realized there is a dire need for adequate infrastructure and for the right skills base to support the
increase in capital and technology that comes with FDI. Moreover, it may lead to exploitation of
the natural resources to the detriment of the domestic economy or it may generate employment
for low wages, with terrible working conditions, and thus worsening the social antagonisms. This
idea is also applied in relation to, the penetration of FDI on domestic industries. While Javorcik
(2004) reported the diffusion effects within the domestic economy, Aitken & Harrison (1999)
observed the FDI out-competing the domestic firms. This will expose industries to intense
competition from the counterparts from the developed nations which after sometime may help
the markets to become more efficient and competitive. Speaking of the disadvantages, it can lead
to the expulsion of the local companies that are not capable of competing with the foreign
counterparts due to restricted financial and technological resources. This may result in shrinkage
of local industries and business and thus increasing unemployment in the economy.
D. Regional economic integration support
International financial institutions have successively promoted the regional economic
cooperation as the globalization strategy for developing countries. This support frequently
encompasses measures such as; providing technical cooperation for trade regimes, compiling
standardization of measures, and constructing regional connectivity. Some of the benefits of
Regional Integration include Market Integration, Competitiveness Enhancement as well as Peace
and Security. According to Schiff and Winters (2003), regional integration means that there can
be enhancement of trade and FDI among countries within the region. Suppressing the tariffs and
other restricted measures within the region, the countries will be able to achieve the advantages
of the scale, reduce transaction costs, and increase productivity. However, the critics argued that
regional integration sometimes results in trade diversion and hence uneven development of
regions. Venables (2003) notes that there is a reaction that liberalization of trade within a region
by developing countries will eventually cause disparities resulting from divergence of income
levels whereby countries that are more developed in the region will gain a greater share in the
liberalization. This may to the detriment of the regional equity and the overall potential for
economic development from integration. Besides, where regional agreements provide protection
to the internal players from the global competition, they tend to confine the resources to less
14 | P a g e
potentially efficient global trading partners hence locking the economies to foregone gains. The
issue of relationship between; regionalism and multilateralism also falls under the debate area.
Some authors, for instance Baldwin (2016), argue that regional integration is a first step to global
integration while others including Bhagwati (2008) warn that the regionalization initiatives may
turn to be bad to universal liberalization. Regional trade agreements may lead to the formation of
other trade rules and regulations which may make it difficult to have global trade agreements.
This fragmentation, can work against the creation of openness in international trade and hinder
the pivotal notion of trade liberalization leading to; trade disputes and issues of waste. Some
studies carried out in the recent past like Bown et al (2017) uphold that international agreements
at the regional level must be harmonized with the WTO principle and should spur other
surrender improvements. It will involve; carrying out some measures that will enhance regional
agreements in a way that, they do not negate the process of global trade liberalization. This may
include the process of accords in targets and restrictions, raising awareness, and coordination
among the member countries for increasing general competitiveness of the region in the global
market.
V. Financial Sector Reforms
A. Banking system restructuring
World‟s financial institutions have supported banking system reforms as an important element or
a component of overall financial reform actions of developing nations. Such measures often may
include the steps like: strengthening a legal and regulatory environment improving the
supervisor‟s ability; NPLs resolution. To the supporters, it especially comes down to the fact that
the efficient banking system is provided to be the backbone of economic development and
financial system. The author Levine (2005) opined that the nations that had relatively developed
banking system were in a better position to experience higher economic growth and decreased
poverty. Commercial banking serves the purposes of providing capital, encouraging the spirit of
entrepreneurship and enabling the savings to be channeled to productive use thus playing a big
role in growth of the economy. Yet, critics argue that the reforms of banking promoted through
international financial organizations, may cause a rise in the financial instability. Stiglitz (2000)
opines that liberalization of banking systems can actually bring in extra risks of banking crises
more so if adequately protected measures have not been developed. If there is deregulation or
privatization process and there is no sober regulation in place then banks are likely to take rather
more risk and this can lead to a state of anarchy in the financial system and therefore stability in
the economy is compromised. It is also a debate on how fast and what order the required banking
reforms should be conducted. While Caprio and Honohan (1999) insist on the necessity of
performing complex reforms taking into account the requirements for the improvement of the
regulation, supervision, and the institutions, Brownbridge and Kirkpatrick (2000) point out to the
single source solutions. They emphasize the necessity to; include institutional and economic
characteristics of the countries into reforms. Such an approach may assist in, minimizing some of
15 | P a g e
the negative impacts and improve; the efficiency of the reform processes in the sphere of
banking sector improvement. Thus, in Čihák et al. s (2013) study, it becomes apparent that
institutional quality and the regulatory capacity are crucial for the effective implementation of
the banking system restructuring. Successful reforms must bear adequate institutions that
implement or enhance the rules and Regulations and adequately supervise the financial facility.
Empowering institutions can help the banks to stand the tropical nations and better to facilitate
the sustainable economic development. Thus, it is critical to note that, although IFFs would
effectively spur the reform of banking systems in developing countries, there need be more
attention to the speed, timing, and conditions that precede it. Thus, by making sure that the
reforms are articulated to be excellent; implemented correctly; and adapted to regional
circumstances.
B. Capital market development
Capital market liberalization has been an area of reform of the financial sector which was
encouraged by the international financial institutions in the developing nations. These efforts
include activities to; improve the Market structures and futures, the provision of transparency
together with the expansion of the range of financial products. The advocates of efficient capital
markets strategies suggested that; they enhance the flow of capital, provide additional sources of
fund other than the banking systems, and strengthen risk management skills. Another research by
La Porta et al. (1997) supports the argument stating that in countries with comparatively
developed capital markets, the rate of economic growth is more inclined to be higher because the
capital markets offer better investment opportunities as well as, market efficiency in capital
allocation. But critics „note that an overly rapid emphasis on capital market development may
lead to more market risk and financial risk. However, Singh (1997) discussed that liberalization
of capital markets too early can open the economy of developing country to volatile and other
related financial capital, which may lead to creation of bubbles in their domestic economy that
sometimes results into harsh financial crises. This remains a recurring aspect that underlines; the
need to structure reforms properly and enhance the regulatory environment for managing risks
and at the same time achieving market development. It also involves the relative merits of bank
oriented or relationship-based financial systems as opposed to market-oriented or arm‟s length
based systems. Whereas Levine (2002) concludes that there is no conclusive empirical evidence
pointing to one system being superior to the other regarding growth-enhancing finance,
Demirgüç-Kunt and Levine (1999) propose that such an optimal structure may trail for a
country‟s level of development and institutional constraints. Finally, while the bank based
systems can always assure stability and easy operations especially in the starting phase of
development the market based systems can always offer flexibility, depth of capital and varieties
of financial services and products as the economy grows. The studies like those conducted by
Didier and Schmukler (2014) stress on the fact that no extreme measures should be taken in the
process of financial sector development. This approach, takes into consideration the fact that;
banks and capital markets have their versatile functions in the economic development and
financial stability. It thus supports enhancing the capacity of regulators, increasing investor
16 | P a g e
awareness and integrating financial sector development with other economic reforms. When
fostered with well-developed and developed operational financial markets accompanied by a
sound banking system, international financial institutions can assist global downward triangle
countries to optimize the possibilities of monetary middlemen and acquire lasting progress and
stability.
C. Financial regulation modernization
Multilateral organizations have been instrumental in promoting improvement of modern finance
regulation international financial institutions in developing nations. They mostly entitle signing
of new laws, improving the powers of supervisory bodies, and bringing the domestic legislation
in accordance with the international standards. It is claimed that sound financial regulation is
now necessary in the current globalized world in order to protect financial integrity and
consumers. This notion is corroborated by Barth et al. , (2013) who established that countries
with sound legal and bureaucratic structures are likely to have stable and efficient financial
markets. Good regulation helps in managing risks but also in creating trust and investors and
other stakeholders hence supporting growth of the economy. However, the opponents claim that
sometimes regulation reforms implemented by IFIs are either too bureaucratic or not appropriate
for the given country. In the same observation, Ocampo (2009) affirms that the environment
favored for leading economies may not suit developing countries because of structural and
institutional differences. This discordance can thus bring problems into reforms and impair their
capacity to; promote more inclusive patterns of economic growth. Issues of growth and
profitability of financial numbers are also at the center of the debate as well as stability. Like
Beck et al. (2016) who assert that financial innovation has the capacity to stimulate the growth in
the economy hence efficiency, the pessimist such as Rajan (2005) who has urged cautions on
complexities of financial innovations. Derivatives and other modern instruments and methods if
left unattended might increase the number of systemic factors and increase the volatility of
financial crises as indicated by the examples of previous global crises. Contemporary research
sources, like Čihák et al. (2012), also stress the necessity of adaptive regulation that would be
able to follow the pace of the financial innovation without getting out of control. It supports the
development of; enabling laws that are adaptive to modern risks and dynamic technologies. It
has been indicated that through flexible and forward-looking regulation and readiness, the
international financial institutions support the opportunities of the countries of the developing
world to achieve financial innovations along with corresponding dangers. With this dynamic
approach to modernizing regulations, it is becoming possible to maintain effectiveness in
regulations‟ ability to protect financial systems and foster sustainable economic growth all over
the world.
D. Microfinance and financial inclusion
Micro finance and financial liberalization programs are approaching major features of the
financial liberalization processes spear headed by international financial institutions in
developing nations. These provide the center for increasing the incentives to make financial tools
17 | P a g e
available for the poor and provisions to the poor, low income earners succession and small
business entities. The myths that surround this subject maintain that; the increase in the level of
financial sector development has the potential to; create a large impact on poverty alleviation as
well as the stimulation of economic growth. A study by Demirgüç-Kunt et al. (2017, p. 125)
shows that those in the credit sector are in a position to mitigate risks, spread out their
consumption as well as invest in education and entrepreneurship thus the promotion of economic
vulnerability and mobility. But critics raise concern in the perceived the effect of micro finance
on poverty reduction. Accordingly to Banerjee et al. (2015), it is claimed that microcredit has
actually had a rather limited impact on the household welfare though the earlier trends have been
optimistic. This has drawn the attention of the positive and negative impacts of microfinance
intervention and therefore the need to assess them for their impacts within different socio-
economic setting. Such controversy also applies to; the microfinance and financial inclusion
regulations. As for the efforts by Christen et al. (2003) that determined that the regulating of
micro finance institutions should be eased while stability is maintained, Cull et al. (2011) are of
the view that it is not easy to regulate the micro finance institutions that are many and very
different from each other. Maintaining the right balance between the stated objectives of
increasing financial access and at the same time building and enhancing the resilience of the
global financial system continues to be a tricky proposition for the policymakers and the
regulators in these scenarios. Sahay et al. (2015) are among the latest authors who stress on the
progressive impact of digital financial services in the context of the Fin-tech movement.
Technology has a potential of; increasing access, decreasing the cost of transactions and
increasing efficiency particularly in the provision of; extension services to the rural and other
hard-to-reach populations. Still, along with these innovations, such important goals as building
encapsulated, high-level consumer protection and advancing the financial literacy of societies are
equally important to protect sensitive segments of populations from negative consequences of
digital services. As a whole, the concept of improving microfinance at this stage correlates with
new trends and is based on this approach, recognizing the further development of the subject and
the need for strategies that can combine the digitization of the financial sector, considering
complexities with regulation and equitably distribute opportunities.
VI. Environmental and Social Policies
A. Sustainable development goals integration
Multilateral lenders have progressively integrated the UN Sustainable Development Goals
(SDGs) into the institutional pillars of a policy and the contributing strategies involved lending to
developing countries. This integration aims at; ensuring that economic development is orderly
accompanied by social and environmental development, in order to achieve an all-round
development venture for the world. Supporters assert that, the integration of SDGs into
development approaches; provides a better strategy of achieving lasting results. Sachs et al.
(2019) argue that the countries that engage in translating the SDG‟s agenda into their national
18 | P a g e
plans have noted positive trends in SDG implementation in various aspects of poverty
eradication, health enhancement, and natural preservation. However, critics opine that when
implementing the SDGs via the achievement of goals, may sometimes involve the mere ticking
of goals while ignoring the structural problems. According to Fukuda-Parr and McNeill (2019),
these institutions‟ focus on a tick-box approach to SDG will only reduce the overarching
development issues into mere checklists that are likely to diminish chances of positive change.
They focus on; the need to treat the structural features of development and governance ills as the
basis for realizing real change. At the same time, there are discussions on the sources of
financing for the SDGs. While Schmidt-Traub and Sachs (2015) emphasize on foreign financial
institutions‟ function of providing funding for implementation of the SDGs, Mawdsley (2018)
describes the observable tendencies towards internationalization of development finance in the
context of the SDGs. Promoting the role of private sector finance while beneficial in terms of
substantive lever of innovation and efficiency, may reintroduce debates on equity and efficiency
in development finance. Other recent sources like Biermann et al. (2017) have also suggested
that, for the real change to happen towards the achievement of the indicated SDGs,
transformative governance frameworks should be adopted. This ranges from the structural
evolution of the world order institutions/regimes, improvement in multi-lateralism and focus on
cause-driven solutions to global problems such as inequalities and climate change. Thus, it is
possible to state that; such approaches are intended to go further beyond improvement, upon the
achievements already made within the framework of; critical development activities, to achieve
more significant and long-lasting development results. In conclusion, it is observed that IFI bear
significant importance in; mainstreaming SDGs into the development agendas, but these
processes should confront the assessed concerns pertaining to depth of; implementation,
financing models, as well as the governance structures. Thus, the institutions aimed at
developing true cooperation, innovation and equity in implementation of development practices
can significantly enhance; the achievement of the SDGs and inclusive and sustainable
development for people around the world.
B. Environmental safeguards implementation
Environmental standards or what may be called environmental compensation has thus become a
topical issue in context with IFI‟s operations or interventions in the developing countries for the
promotion of sustainable development without harming the vulnerable environmental poses.
These safeguards include measures that entail; planning for the evaluation and the prevention of
the risks that may occur from development undertakings affecting the environment. The
supporters of such measures claim these are unbeatable tools for the need to; obtain long-term
result and to save the biological diversity. Rich (2013) has done a study that reinforces this
perspective and shows how assurance of the critical environmental parameters has enhanced
project performance and averted environmental factors that threaten development projects hence
creating the much needed sustainable future for any development project. But critics argue that
sometimes environmental standards act as a barrier due to their bureaucratic and financial
implications with special reference to the developing nations. However, according to Buntaine
19 | P a g e
(2016), costs of compliance with regard to rigid environment standards may supersede the
benefits, which present hard tasks for undertaking, particularly on a small scale and locally based
firms. Therefore it poses a challenge of striking a balance between the conservation of
environment and socio-economic factors. Another issue that thereby arises from the study of
safeguard implementation is; its success rate. Park (2010) examines specific instances in which
environmental safeguards have protected the environment and to some extent agree with Hicks et
al. (2008)‟s findings that certain safeguards have not consistently eliminated secondary
detrimental environmental effects as discussed further below. For example, such aspects prove
the necessity of; managing changes and updating the measures protecting assets, as well as
constant assessment of the results achieved. As newer studies, for instance, Gallagher and Yuan
(2017) have shown, there is a crucial role played by the concepts of capacity building as well as
local ownership to strengthen the measures aimed at protecting the environment. Engaging locals
and institutions in the implementation of safeguard not only enhance compliance but also
enhance ownership of physical surrounding. Such a multi-sector approach; not only enriches the
protective measures of environment but also increases the sustainability and Social Economic
Return On Investment of developmental programs. Therefore, it can be concluded that
environmental safeguard measures are helpful in managing environmental risks that could be
posed by developmental activities but their application should be taken with a perspective that
doesn‟t limit development efforts. Improving on the capacity of personnel implementing
safeguards, altering the management of projects, and encouraging communication with the
community can; enhance the success of safeguards so as to support sustainable development in
developing nations.
C. Social impact assessments
SIA have thus emerged as critical tools used by IFIs in their policy relations with developing
countries to establish a social obligation. These endeavors are aimed at; monitoring the social
impacts of development initiatives, so that resultant projects bring about; fairness in certain areas
of life instead of making them worse. A candid advocate will claim that it enables the
improvement of project designs, stronger development of communities, and overall better results
for developing more sustainable projects. Vanclay et al. (2015) have provided evidence for this
line of thought with their work explaining how such assessments if conducted in the proper
manner will enhance the project‟s results and the project‟s social license. However, critics have
logical issues that can be arising by the social impact assessment to some extent are inadequate
in identifying the detailed picture of social impacts and their future outcomes. Becker & Vanclay
(2003) however point out that indicators can be cue mobilized in ways that are not very helpful,
which means that assessments will be performed in ways that can be rather mechanical than as
comprehensive means for the purpose of securing social integrity. Such criticism lays a
foundation for strong argument that needs to guarantee that assessment processes will be holistic,
culturally valid, and inclusive in order to address the context, worries and objectives that are
present at local settings. The approach used in social impact assessments is also a; point of
controversy. Whereas, Goldman (2000) lays down the argument for involving the local
20 | P a g e
community and empowering them to assess the impacts, O‟Faircheallaigh (2010) analyses the
issues surrounding the integration of professional knowledge with indigenous and local
knowledge systems. To my mind, these objectives must be balanced since they help create more
objective assessments of communities and their priorities. The so-called „new generation‟
research, as demonstrated by authors such as Esteves et al. (2012), stress the continuous and
dynamic nature of social impact assessment. Such approaches allow the assessment to grow with
change in social interactions hence covering all the lifecycle of the development projects to
ensure that the overall intervention remains sensitive to the people‟s needs at every given a time.
Altogether, social impact assessments are indeed a unique way of; achieving social sustainability
in development schemes; the importance of these, however, depends on; methodological
soundness, research legitimacy, and flexibility. Apparently, strengthening these aspects, could
improve the quality and reliability of the assessments to; support the inclusive and equitable
development in the developing nations.
D. Gender equality promotion
Over time there has been a growing recognition by the IFIs to incorporate gender concerns into
the policies and projects of development. They include; incorporation of gender factors into
program planning and delivery, undertaking specific measures towards; women‟s advancement
and supporting policy discussion on gender. The contemporaries noted that the promotion of
gender equality is not only a question of the human rights violations but also the economic
necessity. Gender equality hence promotes development since according to the World Bank
(2012), the level of income generated tends to increase and poverty decrease where gender
equality is enhanced. However, it has been argued that IFIs presently promote to the approach to
gender equality that is too narrow or even instrumentalist at times. Cornwall and Rivas in their
paper (2015) state that; the exclusive concentration on women‟s economic agency risks
marginalization of the other components of gender democracy, including legal reforms.
Consequently, this critique emphasizes on the increased use of the comprehensive approaches to;
meet the complexity of the gendered dispatches procedures. Gender mainstreaming approach
which entails the consideration of gender perspectives in development interventions continues to
be a matter of debate. Although, there is a sign of improvement noticeable in gender
mainstreaming in institutions, as concluded by Moser and Moser (2005), the issue remains most
of these policies have not been implemented to ensure positive changes on the ground. This gap,
calls for improvement in the efforts that seeks to link the implementation of policies with the
pragmatic results favorable; to women and the enhancement of gender equity in the many fronts
of governance. More recent literature, including Rao and Kelleher (2005), speaks of the need for
emancipatory forms of learning that disrupt hegemonic power relations and oppressive gender
paradigms. Such approaches call for women‟s sensitive strategies that will foster; their
economic, social, and political leadership, correspondingly for the enhanced equity and
inclusiveness of development. In conclusion, while IFIs have reported progress in integrating
gender in their development agendas, what is known and acknowledged is that; more sensitive,
especially country-based, gender approaches are being called for. These approaches should;
21 | P a g e
target all the aspects of gender disparities and use the change strategies in providing sustainable
development solutions that will encompass all the society.
22 | P a g e
REFERENCE
Acosta-Ormaechea, S., & Morozumi, A. (2021). The composition of public expenditure and
economic growth in developing countries. IMF Economic Review, 69(2), 380-417.
Arezki, R., & Ploeg, F. V. D. (2019). Can the natural resource curse be turned into a blessing?
The role of trade policies and institutions. IMF Economic Review, 67(1), 158-183.
Bazzi, S., & Clemens, M. A. (2019). Blunt instruments: Avoiding common pitfalls in identifying
the causes of economic growth. American Economic Journal: Macroeconomics,
11(2), 273-309.
Blankenburg, S., & Kozul-Wright, R. (2019). Sovereign debt restructuring and international
investment agreements: A new frontier. Journal of Globalization and Development,
10(1), 1-28.
Caliari, A., & Orr, J. (2020). International financial institutions and the global debt crisis:
Lessons from the 1980s and policy implications for today. Development Policy
Review, 38(1), 81-98.
Chen, G., Geiger, M., & Fu, M. (2020). International financial institutions and post-COVID-19
recovery: Opportunities for a more inclusive and sustainable future. Finance and
Development, 57(4), 20-25.
Das, M. U., & Stijn, C. (2019). Sovereign debt restructuring: Evidence and implications. IMF
Staff Discussion Note, 19/07.
Desai, R. M., & Kharas, H. (2020). Global development finance: Toward a new architecture for
middle-income countries. Brookings Institution Press.
23 | P a g e
Diop, N. (2020). The World Bank and the challenge of development in Africa: Poverty,
infrastructure, and structural transformation. African Development Review, 32(S1),
S1-S19.
Driscoll, D., & Darvas, Z. (2020). The macroeconomic impact of financial sector reforms in
developing countries. Journal of Financial Stability, 46, 100733.
Eichengreen, B., & Panizza, U. (2020). A global safe asset for and from emerging markets. IMF
Economic Review, 68(4), 586-611.
Faini, R., & Grilli, V. (2021). IMF programs and conditionality: An overview of the evidence.
Journal of International Economics, 132, 103572.
Fiszbein, A., & Kanbur, R. (2019). Social protection and inclusive growth: A strategy for the
post-2015 development agenda. World Bank Policy Research Working Paper, 8869.
Fuchs, A., & Vadlamannati, K. C. (2020). The Neocolonialism argument in the age of
globalization: IMF programs and economic reforms in developing countries. World
Development, 130, 104941.
Ghosh, A., Ostry, J. D., & Qureshi, M. S. (2020). Taming the tide of capital flows: A policy
guide. MIT Press.
Gupta, S., & Plant, M. W. (2018). COVID-19 and fiscal policies: Principles for creating better
fiscal outcomes. IMF Special Series on COVID-19.
Haque, N. U., & Khan, M. S. (2019). Do IMF-supported programs work? A survey of the cross-
country empirical evidence. IMF Working Paper, 19/168.
24 | P a g e
Honohan, P., & Klingebiel, D. (2020). Controlling the fiscal costs of banking crises. Journal of
International Money and Finance, 103, 102121.
Kose, M. A., & Ohnsorge, F. (2019). A Decade after the Global Recession: Lessons and
Challenges for Emerging and Developing Economies. World Bank Group.
Kumar, M. S., & Vichyanond, J. (2018). The link between IMF financial programs and
economic reforms: Empirical evidence from developing countries. Journal of
International Financial Markets, Institutions & Money, 54, 246-262.
Lahiri, A., & Rodríguez, M. (2020). Gender inequality and economic growth in developing
countries: Evidence from a panel analysis. Journal of Development Economics, 145,
102468.
Malpass, D. (2020). World Bank Group: Beyond COVID-19 – Sustainable Recovery, Resilient
Future. World Bank.
McKibbin, W. J., & Stoeckel, A. (2020). The global macroeconomic impacts of COVID-19:
Seven scenarios. CAMA Working Paper No. 19/2020.
Nashashibi, K., & Romeu, R. (2019). Economic adjustment programs and the conditionality
debate: Revisiting the IMF‟s role in developing countries. Journal of Economic
Policy Reform, 22(2), 112-131.
Ndikumana, L. (2019). The African debt crisis and the role of international financial institutions:
Policy implications for the post-COVID-19 era. African Development Review, 31(2),
174-194.
25 | P a g e
Ocampo, J. A. (2020). Resetting the international monetary (non)system. Oxford University
Press.
Pereira, J. (2021). Debt relief and sustainability: Assessing the HIPC initiative and beyond.
Development and Change, 52(1), 68-93.
Qureshi, M. S., & Zebregs, H. (2020). Exchange rate regimes and the stability of developing
countries: An empirical investigation. IMF Working Paper, 20/164.
Ratha, D. (2020). Leveraging migration for development: A pragmatic approach. World Bank.
Reinhart, C. M., & Rogoff, K. S. (2020). The long economic hangover of pandemic recessions.
IMF Economic Review, 68(2), 312-338.
Reisen, H., & Soto, M. (2020). The financing needs of developing countries in the era of climate
change. Journal of International Development, 32(4), 679-693.
Rodrik, D. (2018). Populism and the economics of globalization. Journal of International
Business Policy, 1(1), 12-33.
Sachs, J. D., & Woo, W. T. (2020). Sustainable development and the management of natural
resources: A case for reforming international financial institutions. Journal of
Economic Policy Reform, 23(1), 1-19.
Siddiqui, K. (2020). World Bank's development policy: An analysis of conditionalities in the
post-Washington consensus era. Review of Political Economy, 32(3), 464-486.
Stiglitz, J. E. (2019). Reforming the international financial architecture: Lessons from recent
crises. Global Policy, 10(1), 12-21.
26 | P a g e
Subramanian, A. (2020). Trade liberalization and developing countries: The impact of free trade
agreements on growth. Journal of Economic Perspectives, 34(3), 85-106.
Talvi, E., & Végh, C. A. (2020). Tax policy and fiscal sustainability in developing countries:
Theory and evidence. IMF Working Paper, 20/145.
Taylor, L., & Vos, R. (2019). Financial inclusion and the role of international financial
institutions. Journal of International Development, 31(5), 749-762.
Timmis, H. (2020). The role of the IMF and the World Bank in responding to the COVID-19
pandemic. ODI Briefing Paper.
Todaro, M. P., & Smith, S. C. (2020). Economic Development. Pearson.
UNCTAD. (2021). Trade and Development Report 2020: From Global Pandemic to Prosperity
for All. United Nations.
Van Waeyenberge, E., & Bargawi, H. (2020). The World Bank and the post-Washington
Consensus in Africa: The case of Uganda. Review of African Political Economy,
47(165), 251-270.
Yao, X., & Zou, H. (2019). The role of international financial institutions in the development of
capital markets in emerging economies. Journal of Banking & Finance, 104, 105626.
