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The Politics of Hard Choices: IMF Programs and Government Spending

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  • Nooruddin, Irfan
  • Simmons, Joel W.

Abstract

A central component of International Monetary Fund (IMF) programs is reducing government budget deficits. We ask how domestic political considerations shape the distribution of cuts made by governments in IMF programs. Our central finding is that IMF programs shrink the role played by domestic politics. While democracies allocate larger shares of their budgets to public services in the absence of IMF programs, the difference between democracies and nondemocracies disappears under IMF programs. This result has important implications for our understanding of government spending priorities under different resource constraints.We dedicate this article to the memory of Harold K. Jacobson. Robert Kaufman, Lisa Martin, Joan Nelson, and two anonymous reviewers for IO provided valuable comments on earlier drafts, and Chris Achen, Chris Adolph, Leah Anderson, Carew Boulding, Sarah Brooks, Chelsea Brown, Lawrence Broz, Eric Chang, Dan Corstange, Rob Franzese, Nate Jensen, Marcus Kurtz, Margaret Levi, Autumn Payton, Nita Rudra, Heidi Sherman, and James Vreeland offered helpful advice. We thank Autumn Payton for research assistance. Earlier versions were presented at the 2004 Midwest Political Science Association Meetings, the 2004 American Political Science Association Meetings, the 2005 workshop on Distributive Politics and Social Protection in the 21st Century at Ohio State s Mershon Center, and the 2005 International Studies Association Meetings. All errors remain our own.

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Bibliographic Info

Article provided by Cambridge University Press in its journal International Organization.

Volume (Year): 60 (2006)
Issue (Month): 04 (October)
Pages: 1001-1033

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Handle: RePEc:cup:intorg:v:60:y:2006:i:04:p:1001-1033_06

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Cited by:
  1. Martin Steinwand & Randall Stone, 2008. "The International Monetary Fund: A review of the recent evidence," The Review of International Organizations, Springer, vol. 3(2), pages 123-149, June.
  2. Doris A. Oberdabernig, 2012. "Revisiting the Effects of IMF Programs on Poverty and Inequality," Department of Economics Working Papers wuwp144, Vienna University of Economics, Department of Economics.
  3. Rafael Hortala-Vallve & Valentino Larcinese & Stephanie Rickard, 2013. "The Perverse Consequences of Policy Restrictions in the Presence of Asymmetric Information," STICERD - Economic Organisation and Public Policy Discussion Papers Series 48, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  4. Thomas Flores & Irfan Nooruddin, 2009. "Financing the peace: Evaluating World Bank post-conflict assistance programs," The Review of International Organizations, Springer, vol. 4(1), pages 1-27, March.
  5. Christian Mumssen & Yasemin Bal-Gunduz & Christian Ebeke & Linda Kaltani, 2013. "IMF-Supported Programs in Low Income Countries: Economic Impact over the Short and Longer Term," IMF Working Papers 13/273, International Monetary Fund.
  6. Roland Hodler, 2011. "Development (Paradigm) Failures," Working Papers 11.01, Swiss National Bank, Study Center Gerzensee.
  7. Guimaraes, Bernardo & Iazdi, Oz, 2013. "IMF conditionalities, liquidity provision, and incentives for fiscal adjustment," MPRA Paper 48896, University Library of Munich, Germany.
  8. Christoph Moser & Jan-Egbert Sturm, 2011. "Explaining IMF lending decisions after the Cold War," The Review of International Organizations, Springer, vol. 6(3), pages 307-340, September.
  9. Nathan M. Jensen Washington University, Rene Lindstadt, Trinity College Dublin, 2009. "Leaning Right and Learning from the Left: Diffusion of Corporate Tax Policy in the OECD," The Institute for International Integration Studies Discussion Paper Series iiisdp290, IIIS.
  10. James Vreeland, 2006. "IMF program compliance: Aggregate index versus policy specific research strategies," The Review of International Organizations, Springer, vol. 1(4), pages 359-378, December.
  11. Trude Midtgaard & Krishna Vadlamannati & Indra Soysa, 2014. "Does the IMF cause civil war? A comment," The Review of International Organizations, Springer, vol. 9(1), pages 107-124, March.

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