Politics and IMF Conditionality

descriptionPublicationkeyboard_double_arrow_right Article , Research , Other literature type , Preprint 01 Jan 2013Embargo end date: 01 Jun 2013 Germany, Switzerland English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Axel Dreher; Jan-Egbert Sturm; James Raymond Vreeland;

doi: 10.2139/ssrn.2283186 , 10.1177/0022002713499723 , 10.2139/ssrn.2290949 , 10.3929/ethz-a-009899619

handle: 10419/77689 , 10419/80821 , 20.500.11850/67929

Politics and IMF Conditionality

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Abstract

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.

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Germany, Switzerland

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Keywords

INTERNATIONALER WÄHRUNGSFONDS, Sociology and Political Science, Welt, Economics, IWF-Kredit, conditionality, Internationale Wirtschaftsorganisation, SPECIAL ORGANISATIONS OF UNITED NATIONS, UN (INTERNATIONAL LAW), WIRTSCHAFTSENTWICKLUNG, Mitgliedschaft, Aid, VOTINGS + BALLOTS (INTERNAL POLITICS), Conditionality; STIMMABGABE (INNENPOLITIK); VOTINGS + BALLOTS (INTERNAL POLITICS); INTERNATIONAL MONETARY FUND; INTERNATIONALER WÄHRUNGSFONDS; INTERNATIONAL ECONOMIC AID; UN Security Council; ECONOMIC DEVELOPMENT; SPECIAL ORGANISATIONS OF UNITED NATIONS, UN (INTERNATIONAL LAW); WIRTSCHAFTSENTWICKLUNG; ZWISCHENSTAATLICHE WIRTSCHAFTSHILFE; Aid; IMF; Voting; SONDERORGANISATIONEN DER VEREINIGTEN NATIONEN, UN (INTERNATIONALES RECHT), F35, INTERNATIONAL ECONOMIC AID, IMF, Länderrisiko, UN Security Council, IMF, UN Security Council, voting, aid, conditionality, O11, info:eu-repo/classification/ddc/330, ddc:330, SONDERORGANISATIONEN DER VEREINIGTEN NATIONEN, UN (INTERNATIONALES RECHT), IMF, UN Security Council, Voting, Aid, Conditionality, O19, General Business, Management and Accounting, voting, aid, Political Science and International Relations, STIMMABGABE (INNENPOLITIK), ZWISCHENSTAATLICHE WIRTSCHAFTSHILFE, Conditionality, INTERNATIONAL MONETARY FUND, Voting, ECONOMIC DEVELOPMENT, jel: jel:F35, jel: jel:O11, jel: jel:O19

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