IMF Lending Programs and Repression in Autocratic Regimes

• In Event: New Research on IMF Programs: Design, Implementation, and Impact

Abstract

Is participation in IMF lending programs linked to higher levels of repression? Some prior research finds that IMF programs are correlated with diminished levels of respect for human rights, but there are good reasons to revisit the IMF-human rights link. First, credibly estimating the quantitative impact of IMF programs on government repression requires a strategy for handling the problem of the non-random assignment of IMF lending arrangements. Second, accurately gauging countries’ levels of physical integrity rights respect must account for changes in how this indicator has been measured over time. And third, theory suggests that the effect of IMF program participation may not be homogenous across regime types: repression is likelier to increase in autocratic countries under IMF arrangements than in other regimes. In this paper we try to make contributions on all three fronts, starting with theoretical expectations. We lay out two pathways through which physical integrity rights protection can be (unintendedly) undermined by the intervention of the IMF in dictatorships. Security forces in autocracies are predisposed to harshly crack down during episodes of mass unrest, and we show that IMF-linked unrest is likelier in dictatorships. Repression can also be amplified in autocratic borrowers from the IMF as a result of preventive measures. Following Kaire’s (2019) logic, survival-seeking autocrats are spurred by regime insiders to mobilize security forces in the face of pressure from the IMF to liberalize segments of the economy: repression of dissent (such as that springing from organized workers) can be an instrument employed by the state to signal commitment to protect insiders’ political advantages, notwithstanding the economic adjustment costs imposed on politically-connected insiders by the reforms necessitated by IMF programs. To test the claim that IMF programs reduce human rights scores in autocracies we use data from 120 low- and middle-income countries between 1972 and 2014 to link IMF program participation to a more accurate measure of government repression (from Fariss 2014). To handle the selection issue, we use a compound instrumentation approach, recently developed and popularized by Lang (2020), Nelson and Wallace (2017), and Stubbs et al. (2018), to generate our estimates of the conditional difference in the level of government respect for physical integrity rights between IMF participation and non-participation cases. We find a sizeable and robustly statistically significant negative relationship, on average, between participation in IMF lending programs and human rights respect – but only in dictatorships.

Authors

• Christopher Dinkel, Northwestern University

• Stephen Craig Nelson, Northwestern University