Politics and IMF Conditionality

By Axel Dreher, Jan-Egbert Sturm, J. Vreeland. Social Science Research Network, 2015

155 citations recorded by the source corpus.

Bailouts sponsored by the International Monetary Fund (IMF) are famous for their conditionality: in return for continued installments of desperately needed loans, governments must comply with austere policy changes. Many have suggested, however, that politically important countries face rather weak stringency. Obstacles to testing this hypothesis include finding a measure of political importance that is not plagued by endogeneity and obtaining data on IMF conditionality. We propose to measure political importance using temporary membership on the UN Security Council and analyze a newly available data set on the level of conditionality attached to (a maximum of) 314 IMF arrangements with 101 countries over the 1992–2008 period. We find a negative relationship: Security Council members receive about 30 percent fewer conditions. This suggests that the major shareholders of the IMF trade softer conditionality in return for political influence over the Security Council.

Subfields: Development, Information Systems, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/560e779e028622efb53bc73861ffece5ca89e6b7

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In Development

1. L. King
2. Thomas Stubbs
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In Sociology and Political Science

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2. Thomas Stubbs
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Citations in the corpus

• IMF conditionality and development policy space, 1985–2014 (2016, background): “To do so, we build on a growing literature (Dreher et al. 2015; IEO 2007a; 2007b; Stone 2008), and examine the ‘scope’ of IMF conditionality: how many policy areas are subject to reform in IMF programmes? Such metrics speak directly to issues of mission creep examined above, as critics argue that IM”