Does the IMF follow a “one size fits all” approach to crisis resolution and economic reforms?
A. No, reforms are tailored to the problem at hand and further molded to countries’ circumstances. The type of program, the amount of financial support, and the program’s conditions are country-specific. For example, in a study of 133 Fund-supported programs, the IMF’s Independent Evaluation Office found considerable variation in the scale of fiscal adjustment across countries, with about 1/3 of the countries targeting a programmed increase in the fiscal deficit and spending as a percent of GDP. Similarly, low inflation has allowed monetary policy to remain accommodative in the 2008 Hungary program, while high inflation in Ukraine has called for monetary tightening in 2009. IMF programs are also flexible in response to evolving circumstances. For example, fiscal targets for the PRGF-supported program with Nicaragua were revised in 2003-04 to allow for higher social and public investment. Another case is Honduras where in response to a temporary spike in fuel prices in 2005, the PRGF-su
