Do International Bureaucrats Matter? Evidence from IMF Staff Appointments

• In Event: The Role of Bureaucrats in International Cooperation

Abstract

Do policy outcomes in international organizations reflect the distribution of member state preferences? Or is policy making technocratic, shaped by the abilities and biases of individual bureaucrats? Theoretical accounts of inter-governmental cooperation emphasize the role of delegation to international organizations, both in insulating policy making from the preferences of member states and, unavoidably, in creating potential for agency slack. Yet empirical studies of international organizations largely attribute policy outcomes to the differential influence or issue salience of member states. We provide evidence that technocrats also have significant influence over policy. We analyze the impact of senior staff appointments at the International Monetary Fund (IMF) on financial market assessments of sovereign risk, employing an event study approach to estimate changes in risk premia for affected countries. On average individual bureaucrats have a large and statistically significant impact on bond yields. We document rich variation in the magnitude and direction of effects across events. We also demonstrate the substantive significance of the estimates by showing that they are similar in magnitude to those observed following recent reforms to the IMF's formal governance structure.

Authors

• Amanda Kennard, New York University

• Diana Stanescu, Princeton University