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TILEC Seminar: Tatjana Jovanic (University of Belgrade)

The Conditionality of Financial Support by International Financial Institutions as an Instrument for Liberalization in Recipient Countries
10:45-11:45, M 1003

Tatjana Jovanić is an Associate Professor of Public Economic Law at the University of Belgrade, Faculty of Law, where she obtained an LL.B, Master’s degree, and PhD in 2009. She also holds an LLM/Finance from the Institute for Law and Finance of the Johann Wolfgang Goethe University. She was a Visiting Scholar at the University of Pennsylvania Law School, Penn Program on Regulation, and  has spent shorter or longer periods at several European universities and institutes (including Tilburg University Law School), as a researcher or lecturer. She is a member of several international professional associations and a member of the Steering Committee of the ECPR Standing Group on Regulation & Governance. Tatjana has participated in projects aimed at the  harmonisation of Serbian law with EU law, and was a member of several working groups for drafting laws and strategies. Through the Coordination Body established within the National Bank of Serbia for the purpose of monitoring the negotiation process with the EU, as a President of this body and an Advisor to the Governor of the National Bank of Serbia, she has participated in the screening process as of 2013. In August 2015, when the Government of the Republic of Serbia established the Negotiating Team for Accession of the Republic of Serbia to the European Union, Tatjana Jovanić was nominated a member of the Core Negotiation Team, and is responsible for chapters 4 (Free Movement of Capital), 9 (Financial Services) and 17 (Economic and Monetary Policy).

The Conditionality of  Financial Support by International  Financial Institutions as an Instrument for Liberalization in Recipient Countries

Conditionality is an instrument and/or a process aimed to stimulate reforms in recipient countries’ economies, restructuring public sector of the economy, healthcare and pension systems, education, research etc. As a rule, international financial institutions provide resources under the condition that the beneficiary implements certain policies, either prior to the approval of the financing, or before the disbursement of tranches. Conditionality imposed by international financial institutions, either through conditional lending, or some forms of technical assistance, often assumes transplanting laws and legal systems from developed countries. Very often such transplants do not work, or underperform. Legal norm becomes both the object and an operational tool of the conditionality policy, which often reflects priorities set out by international financial institutions and developed states. Whereas law shapes the context of short and medium-term macroeconomic scenario and fiscal policy, in the field of structural reforms, under structural conditionality arrangements, legal norm becomes a tool of the liberalization policy. Some controversial economic policy reforms, such is the privatization of public utility companies, were not foreseen in country’s own development strategies and privatization plans and as such reflect preferences of the financiers. Economic conditionality prioritizes reforms of the public sector of the economy, and priority structural reforms urge for further liberalization.

The author aims to explain conditionality as an instrument, developed through an almost seventy years practice in the field of conditional lending, and the mechanics of financial assistance conditionality, and is predominantly focused on the practice of conditionality of loans disbursed by the International Monetary Fund. After explaining the meaning, technique and context of conditionality agreements, the effects of conditional lending by international financial institutions in underdeveloped economies will be briefly discussed, on the basis of the existing critical literature. One of the purposes of this article is to explain the technique and context of conditionality arrangements, as well as to briefly discuss the context and effects of conditional lending by the IMF and World Bank.  Serbia’s commitments set out in the precautionary Stand-By Arrangement with the IMF and the programmatic loans granted by the World Bank within the Country Partnership Framework for the republic of Serbia (2016-2020), would briefly be presented as a case study.

When: 08 November 2017 10:45

End date: 08 November 2017 11:45

Where: Montesquieu building