Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-21T22:30:59.826Z Has data issue: false hasContentIssue false
  • English
  • Français

Heeding the Sirens: The Politics of IMF Program Participation

Published online by Cambridge University Press:  23 September 2014

Irfan Nooruddin  and
Byungwon Woo
Get access Rights & Permissions [Opens in a new window]

Abstract

Given similar economic distress indicators, why do some states enter into International Monetary Fund (IMF) programs while others do not? Building on extant studies of IMF program participation that highlight the importance of various economic and political determinants, this article proposes an argument focusing on the political incentives of the IMF and a borrowing country when they engage in IMF program negotiations. Specifically, the study develops a domestic politics argument to highlight the interactions among sovereignty costs, competence costs, economic conditions and domestic regime types, and tests the argument using a cross-national time-series dataset of all IMF agreements between 1970 and 2006. It finds that when the economic crisis is mild, democracies are less likely than non-democracies to enter IMF programs, but that when the economic crisis is severe, democracies are more likely to do so than their autocratic counterparts. The article attributes this tendency to democratic leaders’ electoral vulnerability and shows that these patterns become more pronounced as elections draw near.

Type
Original Articles
Information
Political Science Research and Methods , Volume 3 , Issue 1 , January 2015 , pp. 73 - 93
Copyright
Copyright © The European Political Science Association 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

Irfan Nooruddin is Associate Professor in the School of Foreign Service, Georgetown University, P.O. Box 571040, Washington, DC 20057 ([email protected]). Byungwon Woo is Assistant Professor of Political Science, Oakland University, 421A Varner Hall, 2200 N. Squirrel Rd, Rochester, MI 48309 ([email protected]). We thank Todd Allee, Daniel Corstange, Axel Dreher, Rob Franzese, Susan Hyde, Chris Kilby, Peter Rosendorff, Heidi Sherman, James Vreeland, and participants in the 2009 PEIO conference in Geneva for their comments and feedback. The data and code used in this article are publicly available at http://thedata.harvard.edu/dvn/dv/irfan. To view supplementary material for this article, please visit http://dx.doi.org/10.1017/psrm.2014.15.

References

Ai, Chunrung, and Norton, Edward C.. 2003. ‘Interaction Terms in Logit and Probit Models’. Economic Letters 80:123–129.Google Scholar
Amemiya, Takashi. 1985. Advanced Econometrics. Cambridge, MA: Harvard University Press.Google Scholar
Barro, Robert J., and Lee, Jong-Wha. 2005. ‘IMF Programs: Who is Chosen and What are the Effects?’ Journal of Monetary Economics 52:1245–1269.Google Scholar
Bennett, D. Scott, and Stam, Allan. 2000. ‘EUGene: A Conceptual Manual’. International Interactions 26:179–204.Google Scholar
Bird, Graham. 1996. ‘The International Monetary Fund and Developing Countries: A Review of the Evidence and Policy Options’. International Organization 50(3):477–511.Google Scholar
Bird, Graham. 2003. The IMF and the Future: Issues and Options Facing the Fund. New York: Routledge.Google Scholar
Bird, Graham, Hussain, Mumtaz, and Joyce, Joseph. 2004. ‘Many Happy Returns? Recidivism and the IMF’. Journal of International Money and Finance 23(2):231–251.Google Scholar
Broz, J. Lawrence, and Hawes, Michael Brewster. 2006. ‘Congressional Politics of Financing the International Monetary Fund’. International Organization 60:367–399.Google Scholar
Bueno De Mesquita, Bruce, Smith, Alastair, Siverson, Randolph M., and Morrow, James D. 2003. The Logic of Political Survival. Cambridge, MA: MIT Press.Google Scholar
Caraway, Teri L., Rickard, Stephanie J., and Anner, Mark S.. 2012. ‘International Negotiations and Domestic Politics: The Case of IMF Labor Market Conditionality’. International Organization 66(1):27–61.Google Scholar
Conway, Patrick. 2007. ‘The Revolving Door: Duration and Recidivism in Participation in IMF Programs’. Review of Economics and Statistics 89:205–220.CrossRefGoogle Scholar
Dreher, Axel. 2006. ‘IMF and Economic Growth: The Effects of Programs, Loans, and Compliances with Conditionality’. World Development 34:769–788.Google Scholar
Dreher, Axel, and Jensen, Nathan. 2007. ‘Independent Actor or Agent? An Empirical Analysis of the Impact of US Interests on IMF Conditions’. The Journal of Law and Economics 50:105–124.CrossRefGoogle Scholar
Dreher, Axel, Sturm, Jan-Egbert, and Vreeland, James Raymond. 2009. ‘Global Horse Trading: IMF Loans for Votes in the United Nations Security Council’. European Economic Review 53:742–757.Google Scholar
Edwards, Martin S. 2006. ‘Signalling Credibility? The IMF and Catalytic Finance’. Journal of International Relations and Development 9:27–52.Google Scholar
Jaggers, Keith, and Gurr, Ted Robert. 1995. ‘Tracking Democracy’s Third Wave with the Polity III Data’. Journal of Peace Research 32(4):469–482.Google Scholar
Jensen, Nathan. 2004. ‘Crisis, Conditions, and Capital: The Effect of International Monetary Fund Agreements on Foreign Direct Investment Inflows’. Journal of Conflict Resolution 48(2):194–210.Google Scholar
Knight, Malcolm, and Santaella, Julio A.. 1997. ‘Economic Determinants of IMF Financial Arrangements’. Journal of Development Economics 54:405–436.Google Scholar
Lewis-Beck, Michael S., and Paldam, Martin. 2000. ‘Economic Voting: an Introduction’. Electoral Studies 19:113–121.Google Scholar
Marshall, Monty G., Jaggers, Keith, and Gurr, Ted Robert. 2010. ‘POLITY IV PROJECT Political Regime Characteristics and Transitions, 1800-2010 Dataset Users’ Manual’.Google Scholar
Momani, Bessma. 2004a. ‘American Politicization of the International Monetary Fund’. Review of International Political Economy 11:880–904.Google Scholar
Momani, Bessma. 2004b. ‘The IMF, US War on Terrorism, and Pakistan: A Lesson in Economic Statecraft’. Asian Affairs 31:41–50.Google Scholar
Moser, Christoph, and Sturm, Jan-Egbert. 2011. ‘Explaining IMF Lending Decisions after the Cold War’. Review of International Organizations 6:307–340.Google Scholar
Nooruddin, Irfan, and Simmons, Joel W.. 2006. ‘The Politics of Hard Choices: IMF Programs and Government Spending’. International Organization 60:1001–1033.Google Scholar
Pop-Eleches, Grigore. 2008. From Economic Crisis to Economic Reform: IMF Programs in Latin America and Eastern Europe. Princeton, NJ: Princeton University Press.Google Scholar
Signorino, Curtis S., and Ritter, Jeffrey M.. 1999. ‘Tau-b or Not Tau-b: Measuring the Similarity of Foreign Policy Positions’. International Studies Quarterly 43:115–144.Google Scholar
Steinwand, Martin C., and Stone, Randall W.. 2008. ‘The International Monetary Fund: A Review of the Recent Evidence’. Review of International Organizations 3:123–149.Google Scholar
Stone, Randall W. 2002. Lending Credibility: The International Monetary Fund and the Post-Communist Transition. Princeton, NJ: Princeton University Press.Google Scholar
Stone, Randall W.. 2008. ‘The Scope of IMF Conditionality’. International Organization 62:589–620.Google Scholar
Sturm, Jan-Egbert, Berger, Helge, and de Haan, Jakob. 2005. ‘Which Variables Explain Decisions on IMF Credit? An Extreme Bounds Analysis’. Economics & Politics 17(2):177–213.Google Scholar
Thacker, Strom Cronan. 1999. ‘The High Politics of IMF Lending’. World Politics 52:38–75.Google Scholar
Vaubel, Roland. 1996. ‘Bureaucracy at the IMF and the World Bank: A Comparison of the Evidence’. World Economy 19:195–210.CrossRefGoogle Scholar
Vreeland, James Raymond. 2002. ‘Institutional Determinants of IMF Agreements’.Google Scholar
Vreeland, James Raymond. 2003. The IMF and Economic Development. Cambridge: Cambridge University Press.Google Scholar
Vreeland, James Raymond. 2007. The International Monetary Fund: Politics of Conditional Lending. New York: Routledge.Google Scholar
Supplementary material: PDF

Nooruddin and Woo Supplementary Material

Supplementary Material

Download Nooruddin and Woo Supplementary Material(PDF)
PDF 214.2 KB
Supplementary material: PDF

Nooruddin and Woo Supplementary Material

Supplementary Material

Download Nooruddin and Woo Supplementary Material(PDF)
PDF 29.7 KB