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The criticism is that the system of voting power distribution through a quota system institutionalizes borrower subordination and creditor dominance. The resulting division of the IMF's membership into borrowers and non-borrowers has increased the controversy around conditionality because the borrowers are interested in increasing loan access while creditors want to maintain reassurance that the loans will be repaid.

A study by Bumba Mukherjee found that developing Democracy benefit more from IMF programs than developing Autocracy because policy-making, and the process of deciding where loaned money is used, is more transparent within a democracy. One study done by Randall Stone found that although earlier studies found little impact of IMF programs on balance of payments, more recent studies using more sophisticated methods and larger samples "usually found IMF programs improved the balance of payments".

In 2010, the framework was abandoned so the IMF could make loans to Greece in an unsustainable and political situation.

The topic of sovereign debt restructuring was taken up by IMF staff in April 2013 for the first time since 2005, in a report entitled "Sovereign Debt Restructuring: Recent Developments and Implications for the Fund's Legal and Policy Framework". The paper, which was discussed by the board on 20 May, summarised the recent experiences in Greece, St Kitts and Nevis, Belize, and Jamaica. An explanatory interview with deputy director Hugh Bredenkamp was published a few days later, as was a deconstruction by Matina Stevis of The Wall Street Journal.

The staff was directed to formulate an updated policy, which was accomplished on 22 May 2014 with a report entitled "The Fund's Lending Framework and Sovereign Debt: Preliminary Considerations", and taken up by the executive board on 13 June. "The Fund's Lending Framework and Sovereign Debt – Preliminary Considerations" 22 May 2014 (also bears date June 2014; team of 20 led by Reza Bakir and supervised by Olivier Blanchard, Sean Hagan, Hugh Bredenkamp, and Peter Dattels) The staff proposed that "in circumstances where a (Sovereign) member has lost market access and debt is considered sustainable ... the IMF would be able to provide Exceptional Access on the basis of a debt operation that involves an extension of maturities", which was labeled a "reprofiling operation". These reprofiling operations would "generally be less costly to the debtor and creditors—and thus to the system overall—relative to either an upfront debt reduction operation or a bail-out that is followed by debt reduction ... (and) would be envisaged only when both (a) a member has lost market access and (b) debt is assessed to be sustainable, but not with high probability ... Creditors will only agree if they understand that such an amendment is necessary to avoid a worse outcome: namely, a default and/or an operation involving debt reduction ... Collective action clauses, which now exist in most—but not all—bonds would be relied upon to address collective action problems."

Some research has found that IMF loans can reduce the chance of a future banking crisis,Papi, Luca, Andrea F. Presbitero, and Alberto Zazzaro. "IMF lending and banking crises." IMF Economic Review 63, no. 3 (2015): 644-691. while other studies have found that they can increase the risk of political crises.Dreher, Axel, and Martin Gassebner. "Do IMF and World Bank programs induce government crises? An empirical analysis." International Organization (2012): 329-358. IMF programs can reduce the effects of a currency crisis.Dreher, Axel, and Stefanie Walter. "Does the IMF help or hurt? The effect of IMF programs on the likelihood and outcome of currency crises." World Development 38, no. 1 (2010): 1-18.

Some research has found that IMF programs are less effective in countries which possess a developed-country patron (be it by foreign aid, membership of postcolonial institutions or UN voting patterns), seemingly due to this patron allowing countries to flaunt IMF program rules as these rules are not consistently enforced.Stone, Randall W. "The political economy of IMF lending in Africa." American Political Science Review (2004): 577-591. Some research has found that IMF loans reduce economic growth due to creating an economic moral hazard, reducing public investment, reducing incentives to create a robust domestic policies and reducing private investor confidence.Butkiewicz, James L., and Halit Yanikkaya. "The effects of IMF and World Bank lending on long-run economic growth: An empirical analysis." World Development 33, no. 3 (2005): 371-391. Other research has indicated that IMF loans can have a positive impact on economic growth and that their effects are highly nuanced.Bird, Graham, and Dane Rowlands. "The effect of IMF Programmes on economic growth in low income countries: An empirical analysis." The Journal of Development Studies 53, no. 12 (2017): 2179-2196.

• Developed countries were seen to have a more dominant role and control over less developed countries (LDCs).
• The Fund worked on the incorrect assumption that all payments disequilibria were caused domestically. The Group of 24 (G-24), on behalf of LDC members, and the United Nations Conference on Trade and Development (UNCTAD) complained that the IMF did not distinguish sufficiently between disequilibria with predominantly external as opposed to internal causes. This criticism was voiced in the aftermath of the 1973 oil crisis. Then LDCs found themselves with payment deficits due to adverse changes in their terms of trade, with the Fund prescribing stabilization programmes similar to those suggested for deficits caused by government over-spending. Faced with long-term, externally generated disequilibria, the G-24 argued for more time for LDCs to adjust their economies.
• Some IMF policies may be anti-developmental; the report said that deflationary effects of IMF programmes quickly led to losses of output and employment in economies where incomes were low and unemployment was high. Moreover, the burden of the deflation is disproportionately borne by the poor.
• The IMF's initial policies were based in theory and influenced by differing opinions and departmental rivalries. Critics suggest that its intentions to implement these policies in countries with widely varying economic circumstances were misinformed and lacked economic rationale.

ODI conclusions were that the IMF's very nature of promoting market-oriented approaches attracted unavoidable criticism. On the other hand, the IMF could serve as a scapegoat while allowing governments to blame international bankers. The ODI conceded that the IMF was insensitive to political aspirations of LDCs while its policy conditions were inflexible.

Argentina, which had been considered by the IMF to be a model country in its compliance to policy proposals by the Bretton Woods institutions, experienced a catastrophic economic crisis in 2001, Memoria del Saqueo, Fernando Ezequiel Solanas, documentary film, 2003 (Language: Spanish; Subtitles: English) YouTube.com which some believe to have been caused by IMF-induced budget restrictions—which undercut the government's ability to sustain national infrastructure even in crucial areas such as health, education, and security—and privatisation of strategically vital national resources. Others attribute the crisis to Argentina's misdesigned fiscal federalism, which caused subnational spending to increase rapidly.Stephen Webb, "Argentina: Hardening the Provincial Budget Constraint", in Rodden, Eskeland, and Litvack (eds.), Fiscal Decentralization and the Challenge of Hard Budget Constraints (Cambridge, Massachusetts: MIT Press, 2003). The crisis added to widespread hatred of this institution in Argentina and other South American countries, with many blaming the IMF for the region's economic problems. The post-2000s trend toward moderate left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures has been ascribed to this crisis.

In 2001, the Independent Evaluation Office, an autonomous body, was established to conduct independent evaluations of policies and activities of the International Monetary Fund.

In 2006, a senior ActionAid policy analyst Akanksha Marphatia stated that IMF policies in Africa undermine any possibility of meeting the Millennium Development Goals (MDGs) due to imposed restrictions that prevent spending on important sectors, such as education and health.

In an interview (2008-05-19), the former Romanian Prime Minister Călin Popescu-Tăriceanu claimed that "Since 2005, IMF is constantly making mistakes when it appreciates the country's economic performances". Former Tanzanian President Julius Nyerere, who claimed that debt-ridden African states were ceding sovereignty to the IMF and the World Bank, famously asked, "Who elected the IMF to be the ministry of finance for every country in the world?"

Jeffrey Sachs argues that the IMF's "usual prescription is 'budgetary belt tightening to countries who are much too poor to own belts. Sachs wrote that the IMF's role as a generalist institution specialising in macroeconomic issues needs reform. Conditionality has also been criticised because a country can pledge collateral of "acceptable assets" to obtain waivers—if one assumes that all countries are able to provide "acceptable collateral".

One view is that conditionality undermines domestic political institutions. The recipient governments are sacrificing policy autonomy in exchange for funds, which can lead to public resentment of the local leadership for accepting and enforcing the IMF conditions. Political instability can result from more leadership turnover as political leaders are replaced in electoral backlashes. IMF conditions are often criticised for reducing government services, thus increasing unemployment.

Another criticism is that IMF policies are only designed to address poor governance, excessive government spending, excessive government intervention in markets, and too much state ownership. This assumes that this narrow range of issues represents the only possible problems; everything is standardised and differing contexts are ignored. A country may also be compelled to accept conditions it would not normally accept had they not been in a financial crisis in need of assistance.

On top of that, regardless of what methodologies and data sets used, it comes to same the conclusion of exacerbating income inequality. With Gini coefficient, it became clear that countries with IMF policies face increased income inequality.

It is claimed that conditionalities hinder social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programmes lead to an increase in poverty in recipient countries.Hertz, Noreena. The Debt Threat. New York: Harper Collins Publishers, 2004. The IMF sometimes advocates "Austerity", cutting public spending and increasing taxes even when the economy is weak, to bring budgets closer to a balance, thus reducing . Countries are often advised to lower their corporate tax rate. In Globalization and Its Discontents, Joseph E. Stiglitz, former chief economist and senior vice-president at the World Bank, criticises these policies.Stiglitz, Joseph. Globalization and its Discontents. New York: WW Norton & Company, 2002. He argues that by converting to a more monetarist approach, the purpose of the fund is no longer valid, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF "was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community."

Stiglitz concludes, "Modern high-tech warfare is designed to remove physical contact: dropping bombs from 50,000 feet ensures that one does not 'feel' what one does. Modern economic management is similar: from one's luxury hotel, one can callously impose policies about which one would think twice if one knew the people whose lives one was destroying."

The researchers Eric Toussaint and Damien Millet argue that the IMF's policies amount to a new form of colonisation that does not need a military presence:

International politics play an important role in IMF decision making. The clout of member states is roughly proportional to its contribution to IMF finances. The United States has the greatest number of votes and therefore wields the most influence. Domestic politics often come into play, with politicians in developing countries using conditionality to gain leverage over the opposition to influence policy.

Academic Jeremy Garlick cites IMF loans to South Korea during the 1997 Asian financial crisis as widely perceived by the South Korean public as a debt-trap.

In 2016, the IMF's research department published a report titled "Neoliberalism: Oversold?" which, while praising some aspects of the "neoliberal agenda", claims that the organisation has been "overselling" fiscal austerity policies and financial deregulation, which they claim has exacerbated both financial crises and economic inequality around the world. Globalization's True Believers Are Having Second Thoughts . Time, 3 June 2016 IMF: The last generation of economic policies may have been a complete failure . Business Insider, May 2016.

In 2020 and 2021, Oxfam criticized the IMF for forcing tough austerity measures on many low income countries during the COVID-19 pandemic, despite forcing cuts to healthcare spending, would hamper the recipient's response to the pandemic.

Arguments in favour of the IMF supporting dictatorships is the claim that economic stability is a precursor to democracy. A 2017 study found no evidence of IMF lending programs undermining democracy in borrowing countries, it found "evidence for modest but definitively positive conditional differences in the democracy scores of participating and non-participating countries".

A 2020 study found the reverse causality with democracy as a precursor to economic stability. Critics highlight various examples in which democratised countries fell after receiving IMF loans.

Party-based autocracies and democracies can face similar incentives when considering agreements with IMF, in contrast to personalist and military regimes.

The FPIF remarked that there is a recurring pattern: "the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO's Agreement on Agriculture pried open markets."

 
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There is no worldwide consensus on the status of the Republic of Kosovo: It is recognised as independent by 91 countries, while others consider it an autonomous province of Serbia. See: International recognition of Kosovo.