The requirements placed on the usage or distribution of money lent to another country. Conditionality is most often associated with aid money. International organizations, such as the International Monetary Fund (IMF) and World Bank, or individual countries can use conditionality when lending money to another country. The donor country requires that the country receiving the funds adhere certain rules directing the use of funds.

Conditions can range from provisions to reduce corruption to more controversial requests, such as improvement in human rights or reduction in deficit spending. The donor organization may also require that the funds be used toward a specific project rather than being left to the discretion of the receiving country.

Some argue that the use of conditions on aid money is controversial. Conditions imply that the donor country knows what the best use of funds are, or that the recipient country is unable to make the economic or political adjustments required to be a functioning entity. In some cases, conditionality can help push the receiving country toward improvement, while in others it might lead to poltical conflict in the receiving nation.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Conditionality — Con*di tion*al i*ty, n. The quality of being conditional, or limited; limitation by certain terms. [1913 Webster] …   The Collaborative International Dictionary of English

  • Conditionality — For other uses, see Conditionality (disambiguation). Conditionality is a concept in international development, political economy and international relations and describes the use of conditions attached to a loan, debt relief, bilateral aid or… …   Wikipedia

  • conditionality — The terms under which the International Monetary Fund (IMF) provides balance of payments support to member states. The principle is that support will only be given on the condition that it is accompanied by steps to solve the underlying problem.… …   Big dictionary of business and management

  • conditionality — conditional ► ADJECTIVE 1) subject to one or more conditions being met. 2) (of a clause, phrase, conjunction, or verb form) expressing a condition. ► NOUN ▪ the conditional mood of a verb, for example should in if I should die. DERIVATIVES… …   English terms dictionary

  • conditionality — noun see conditional I …   New Collegiate Dictionary

  • conditionality — See conditional. * * * …   Universalium

  • conditionality — noun a) A state of being subject to conditions. b) A condition applied to the access of a government to credit facilities and other international financial assistance, especially from the IMF and the World Bank …   Wiktionary

  • Conditionality —    Economic conditions imposed on a country when it draws funds from the IMF (International Monetary Fund). The conditions often spell out requirements for economic policy, government spending and taxation and exchange rate policy.    ► See also… …   Financial and business terms

  • Conditionality — ⇡ Konditionalität …   Lexikon der Economics

  • conditionality — n. state of being not absolute, dependence on certain terms or conditions …   English contemporary dictionary

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