A General Agreement On Tariffs And Trade Accord In 1993 Called For
IMF conditionality is a series of strategies or “conditions” that the IMF needs in exchange for financial resources. The IMF does not require country guarantees for loans, but asks the government for help to correct its macroeconomic imbalances in the form of political reforms. If the conditions are not met, the funds are withheld. Conditionality is the most controversial aspect of IMF policy. These credit conditions ensure that the credit country will be able to repay the fund and that the country will not seek to resolve its balance-of-payments problems in a way that would have a negative impact on the international economy. The incentive problem of moral hazard, namely the actions of economic operators who maximize their own benefits at the expense of others if they do not bear the full consequences of their actions, is mitigated by conditions rather than providing guarantees; In any case, countries that need IMF loans do not have guarantees of international value. Conditionality also assures the IMF that the funds allocated to them will be used for the purposes defined in the articles relating to the agreement and provides guarantees as to the country`s ability to correct its macroeconomic and structural imbalances. The Fund believes that the member`s adoption of certain corrective measures or policies will allow the member to repay the Fund, which will ensure that the same resources are available to assist other members. The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries whose overall objective was to promote international trade by removing or removing trade barriers, such as tariffs or quotas.
According to its preamble, its objective was to “substantially reduce tariffs and other trade barriers and eliminate mutually beneficial and reciprocal preferences.” While THE GATT was a set of rules agreed upon by nations, the WTO is an intergovernmental organization with its own headquarters and staff, whose scope covers both traded goods and trade in the service sector and intellectual property rights.