IMF conditionality: theory and evidence

This article analyzes whether and to what extent reliance on conditionality is appropriate to guarantee the revolving character of the resources of the International Monetary Fund (IMF). The paper presents theoretical arguments in favor of conditionality, and those against the use of conditions. It summarizes the track record of program implementation and discusses the evidence of factors determining implementation. Whether proponents or critics of conditionality can be supported by existing data analysis is also investigated, as is the success of conditionality in terms of outcomes. The final section draws policy implications.     

Assembling noncitizenship through the work of conditionality

Abstract

We develop a framework for understanding noncitizenship that combines attention to systemic processes with interest in contingency and indeterminacy in the production and substantive practices associated with noncitizen legal status categories and trajectories. We argue that noncitizenship is a dynamic, multi-scalar assemblage that brings together disparate elements in patterned and changing ways. Individuals and institutions generate the formal and substantive systems that confer or deny noncitizens the formal and substantive right to be present in a country and/or to access entitlements. Noncitizens exercise agency in choosing to make claims (or choosing to not make claims) to substantive rights, and the individuals and institutions with which they interact may facilitate or hinder such claims-making. In this process, social actors are enacting conditionality; they are working to meet the conditions required to maintain presence and access. Discretion, migrant agency, unequal social interactions, and social learning unfold over time and can generate a range of experiences of noncitizenship and legal status trajectories. These do not necessarily conform to expected pathways and timelines, and may combine access to various resources and public goods in variable and contingent ways. We illustrate the framework with data from research conducted in Toronto.     

Cross-pressures and the European lavender vote: Testing the conditionality of the sexuality gap

Emerging evidence points towards the existence of a “sexuality gap” in the political preferences and behaviour of lesbian, gay and bisexual (LGB) voters and that of heterosexuals in Western Europe. Very little is known, however, about how this gap is moderated by socio-economic status. This paper tests the conditionality of the sexuality gap by analysing how the effect of LGB status is conditioned by income and education. Empirically, we rely on data from the European Social Survey (2002–2017) to analyse the marginal effect of sexuality in determining ideological placement, vote choice and support for economic redistribution across different income and education levels. The results demonstrate that the divergence between LGBs' and heterosexuals’ preferences only emerges amongst those with higher income and education. The findings also suggest that the sexuality gap may be the result of the asymmetric effect of these socio-economic variables for LGBs and heterosexuals.     

Contesting the Governance of Capital Flows at the IMF

Financial crises can trigger different actors to reassess their ideas, interests, and policies, and sometimes change them. The Global Financial Crisis triggered a reassessment at the International Monetary Fund (IMF) regarding the utility of capital account liberalization and the management of capital flows. In 2010, the IMF embarked upon an official reassessment of these issues and in 2012 published an official “institutional view” on capital account liberalization and managing capital flows that gives more caution toward capital account liberalization and endorses the use of capital controls in certain circumstances. This article traces the political process that yielded the IMF's new view and draws out lessons for thinking about policy change in global economic governance institutions.     

Recalibrating Policy Orthodoxy: The IMF Since the Great Recession

This special issue reviews patterns of policy stability and change at the International Monetary Fund (IMF) since the Great Recession and attempts to explain their causes. The contributors show that the crisis ignited a reassessment regarding how the IMF would position itself as a pivotal player in global economic governance. Some new ideas and evidence definitely found their way into IMF decision making, but this process was often tempered by the nature of the institution and the powerful interests that control its governing structure. Where change did occur, its causal generators could be found in some combination between IMF staff politics, a string of innovations coming from academic and IMF economists, and the emerging economic powers' creative leveraging of institutional fora both within and inside the Fund.     

Banking on Seniority: The IMF and the Sovereign's Creditors

The programs designed by the International Monetary Fund (IMF) during the Global Financial Crisis have shown more awareness of the importance of domestic demand for the prospects of economic recovery. Yet the IMF has continued to do little about the late payments made by governments to domestic creditors and suppliers. In contrast, the greater protection historically awarded by the IMF to foreign creditors has endured throughout the recent crisis. The article suggests that, in order to adequately balance foreign creditor seniority and growth objectives, the IMF may sometimes need to emphasize equitable burden‐sharing across categories of creditors rather than privilege the interests of international bond markets.     

The Gnomes of Washington: Four Myths of the 1976 IMF Crisis

The IMF settlement of December 1976 looms large in popular and partisan views of the politics of the 1970s. It is argued here that conventional academic wisdom has come to embody several misleading myths about its impact on economic policy. Evidence is presented to challenge four such myths which suggest that the IMF forced the Labour government to launch an attack on public spending, introduce cash limits to control public spending, introduce monetary targets and abandon the pursuit of full employment through demand management.
Although the language of the [IMF] negotiations reflected the arcane terms of international finance… the decisions required of the British Government were profoundly political… behind the technical financial decisions lay fundamental differences over the appropriate balance between the private and public sectors, the priority between capital accumulation and social welfare, the relative weight to be given to incentives and equality… What was at issue was the future shape of the political economy of Great Britain.¹     

IMF Conditionality,Government Partisanship,and the Progress of Economic Reforms

The International Monetary Fund (IMF) often seeks to influence countries' domestic public policy via varying levels of conditionality—linking financial support to borrowing governments' commitment to policy reforms. When does extensive conditionality encourage domestic economic reforms and when does it impede them? We argue that, rather than universally benefiting or harming reforms, the effects of stricter IMF conditionality depend on domestic partisan politics. More IMF conditions can pressure left‐wing governments into undertaking more ambitious reforms with little resistance from partisan rivals on the right; under right governments, however, more conditions hinder reform implementation by heightening resistance from the left while simultaneously reducing leaders' ability to win their support through concessions or compromise. Using data on post‐communist IMF programs for the period 1994–2010, we find robust evidence supporting these claims, even after addressing the endogeneity of IMF programs via instrumental variables analysis.     

Effects of the IMF and World Bank on public expenditure accountability in Jamaica

This article analyses the positive and negative effects of IMF stabilization programmes and World Bank structural adjustment programmes on the accountability of public expenditure management in Jamaica in the period 1980–1992. Particular attention is given to the negative accountability effects of IMF budget deficit reduction targets imposed on a Government uncommitted to meeting such targets. Many of the arguments presented in this article relate to expenditure accountability problems more generally and it cannot be proved that IMF conditionality was the sole cause of these problems. It is argued, however, that IMF conditionality contributed. This argument is based on a large number of semi-structured interviews conducted in 1993 with Jamaican bureaucrats, politicians, donors, academics and private sector representatives, many of whom were involved in Jamaica's budget formulation process, and on analysis of the existing literature and data. The conclusion reached is that donor-guided reform programmes have complex and often conflicting impacts on the accountability of the Government's budgetary practices. A major question that arises is the relative importance that donors such as the IMF place on budget conditionality as against accountability. The conclusion based on the Jamaican experience is that the IMF placed greater emphasis on the former. © 1998 John Wiley & Sons, Ltd.     

How Russia's Internet Research Agency Built its Disinformation Campaign

In this article we analyse features of the information influence operations run by the St. Petersburg based Internet Research Agency, targeted at Europe. Informed by publicly available ‘open source’ data, the analysis delineates three key tactics that underpinned their disinformation campaign: account buying; ‘follower fishing’; and narrative switching. Both individually and collectively these were designed to build the reach, impact and influence of the ideologically loaded messages that social media account operators authored and amplified. The particular value of the analysis is that whilst a lot of recent public and political attention has focussed upon Kremlin backed disinformation in respect of the 2016 United States presidential election, far less work has addressed their European activities.     

Back to Basics: The Great Recession and the Narrowing of IMF Policy Advice

This article contributes to the literature on the dynamics of change and continuity in the International Monetary Fund's (IMF's) policy paradigm. The IMF embarked on a process of “streamlining conditionality” during the 2000s, but many observers have argued that the IMF's policy paradigm from the 1990s remains intact. This article examines whether the scope of the IMF's policy advice to borrowers during the Great Recession narrowed in comparison to its advice to borrowers during the heyday of the Washington consensus in the 1980s and 1990s. The article uses qualitative content analysis to establish the frequency of a series of policy dialogue indicators in four sample sets of countries requesting IMF stand‐by arrangements over three decades. The evidence suggests that contemporary IMF policy advice to borrowers continues to stress the importance of fiscal consolidation, with reduced emphasis on promoting the structural economic reforms associated with the Washington consensus era.     

Time and technique: the legal lives of the 26-week qualifying period

This paper aims to bring an appreciation of legal form, technicalities, and legislative drafting to growing interdisciplinary literatures on time and governance. Scholarship across politics, geography, science studies and anthropology continues to trace the productive force and specific qualities of diverse temporal horizons. At the same time socio-legal scholars increasingly focus on the work of making and negotiating law, engaging with the dogged, everyday work of legal experts and bureaucrats. Yet little attention has been paid, to date, to the work of legislative drafters. This paper follows the ‘legal lives’ of qualifying periods on family-friendly employment rights. As examples of legal technicalities that work with time, qualifying periods form an important part of the regulatory structure that separates precarious workers from ‘regular’ employees in UK law. Drawing on documentary research and interviews with policy experts, union activists and legislative drafters, this paper focuses on the formal qualities of qualifying periods, arguing that these legal technicalities conjure time and legal form as inextricable. Whenever law becomes relevant to conversations about time and governance, we could usefully pay attention to the idiosyncrasies and controversies occupying legal form and legislative drafting.