Commitments and Credibility: How Powerful States Learn from Institutions

• In Event: Public Diplomacy and Bureaucracy

Abstract

Powerful states’ attempts to influence other countries are constrained by uncertainty about the credibility of target countries’ commitments and the implementation of promised reforms. We theorize two forms of information states obtain from international organizations to reduce this uncertainty: ex-ante information about other countries’ commitments to pursue certain reforms, and ex-post evidence of actual behavior of respective governments. Empirically, we focus on state action in the International Monetary Fund (IMF) between 1995 and 2015. We study the linkages between IMF conditionality, Executive Board members’ statements in country-specific lending decisions, and bilateral aid to those countries. We find that powerful states only increase bilateral aid to developing countries when they are satisfied with borrowing countries’ implementation of IMF-sponsored reforms. These findings show the kind of information that powerful countries value from multilateral institutions and reveal interconnected multi-fora processes through which powerful states pursue their goals and shape the international order.

Authors

• Timon Forster, Freie Universität Berlin

• Dan Honig, University College London & Georgetown McCourt

• Alexander Kentikelenis, Bocconi University