New Research on IMF Programs: Design, Implementation, and Impact

Session Submission Type: Virtual Full Paper Panel

Session Description

This panel weaves together the most recent research on the study of International Monetary Fund (IMF) programs’ design, implementation, and the impact on the borrowing countries. The first paper examines the design of IMF programs with a particular emphasis on the determinants of program negotiations’ difficulty level, and the second one ties the design stage to implementation by revisiting the concept of IMF program ownership. The last two papers in the panel analyze the (unintended) impact of IMF lending on its borrowers, concentrating on government repression under IMF programs, and finally on the rise of populism.
In their paper titled “The Money is in the Mission: Explaining variation in IMF missions”,
Ferry & Zeitz focus on an understudied phase of IMF lending, i.e., the duration, intensity, location, and participants of IMF missions, with the aim to answer the question of “What explains when programs are more difficult to negotiate?” In this context, they study the relevance of factors in both creditor and borrowing countries, including shareholders’ geopolitical motivations, financial market exposure, recipient ideology and domestic support. Moreover, their paper explores how missions are related to the ultimate design of IMF programs. In doing so, the paper intends to shed light on the bureaucratic workings that underpin IMF programs.

Aiming to build a bridge between the literature focusing on IMF program design and implementation, Konstantinidis & Reinsberg’s paper titled “A Model of IFI Conditionality, Program Ownership, and De Facto Implementation”, studies IMF program ownership across a sample of IMF arrangements between 1980 and 2014. They operationalize the concept of ownership as the content and timing of implemented reforms, taking into account the counterfactual level of de jure liberalization that would be achieved without the IMF conditionality. Their paper proposes an informational mechanism of IMF conditionality, and apply tools from contract and principal-agent theory to derive the relationship between IMF conditionality, program ownership, and de facto implementation of IMF reforms.

The next two papers focus on IMF programs’ impact on the recipient countries. Angin & Metinsoy’s paper titled “The Impact of IMF Programs on Populism” analyzes when and how IMF programs might trigger the rise of populism in borrowing countries. They argue that IMF programs push the electorate to search for alternatives on the left and the right extremes of the political spectrum by highlighting (or causing) a perceived incompetence of the government and a sentiment of violation of sovereignty. They propose that those sentiments aggravate the conditions ripe for populist agendas in borrowing regimes. They test this theory in a global sample of IMF borrowers in a novel dataset, similar the other paper in the panel.

Last but not least, Dinkel & Nelson’s paper titled “IMF Lending Programs and Repression in Autocratic Regimes” revisits the question of whether IMF program participation can be linked to higher levels of state repression. They propose a refinement for the existing studies by looking at the regime type in the study of repression under IMF programs. They find evidence in a sample of 120 low and middle-income countries that the rise of unrest is more likely in dictatorships than in democracies. They propose that autocracies use repression as an instrument to convey their commitment to protect the interests of the regime insiders. Similar to Angin & Metinsoy’s paper, they suggest that this is an unintended consequence of IMF programs.

Through this panel, design, implementation and impact of IMF programs will be put into perspective by bringing together research conducted with diverse methods; and novel theoretical and empirical contributions to the study of the IMF will be presented.

Sub Unit

• Division 16: International Political Economy

Cosponsor

• Division 17: International Collaboration

Individual Presentations

• The Money is in the Mission: Explaining Variation in IMF Missions - Lauren Elizabeth Ferry, University of Mississippi; Alexandra Olivia Zeitz, Concordia University

• A Model of IFI Conditionality, Program Ownership, and De Facto Implementation - Nikitas Konstantinidis, IE University; Bernhard Reinsberg, University of Cambridge

• The Impact of IMF Programs on Populism - Merih Angin, Koç University; Saliha Metinsoy, University of Groningen

• IMF Lending Programs and Repression in Autocratic Regimes - Christopher Dinkel, Northwestern University; Stephen Craig Nelson, Northwestern University

Chair

• Randall W. Stone University of Rochester

Discussants

• Mark Copelovitch University of Wisconsin, Madison

• Randall W. Stone University of Rochester