IDEAS home Printed from https://ideas.repec.org/a/eee/eecrev/v53y2009i7p742-757.html
   My bibliography  Save this article

Global horse trading: IMF loans for votes in the United Nations Security Council

Author

Listed:
  • Dreher, Axel
  • Sturm, Jan-Egbert
  • Vreeland, James Raymond

Abstract

We investigate whether temporary members of the United Nations Security Council receive favorable treatment from the International Monetary Fund (IMF) using panel data for 197 countries over the period from 1951 to 2004. Our results indicate a robust positive relationship between temporary Security Council membership and participation in IMF programs, even after accounting for economic, political, and country-specific factors. There is also evidence that Security Council membership reduces the number of conditions included in IMF programs. IMF loans seem to be a mechanism by which the major shareholders of the Fund can win favor with voting members of the Security Council.

Suggested Citation

  • Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
    • Handle: RePEc:eee:eecrev:v:53:y:2009:i:7:p:742-757
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014-2921(09)00031-2
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Songying Fang, 2008. "The Informational Role of International Institutions and Domestic Politics," American Journal of Political Science, John Wiley & Sons, vol. 52(2), pages 304-321, April.
    2. Vreeland,James Raymond, 2003. "The IMF and Economic Development," Cambridge Books, Cambridge University Press, number 9780521016957.
    3. Sandler,Todd & Hartley,Keith, 1999. "The Political Economy of NATO," Cambridge Books, Cambridge University Press, number 9780521630931.
    4. André Sapir, . "Fragmented power- Europe and the global economy," Books, Bruegel, number 54.
    5. Sandler, Todd & Hartley, Keith, 1999. "The Political Economy of Nato: Past, Present, and into the 21st Century," Staff General Research Papers Archive 1441, Iowa State University, Department of Economics.
    6. Robert K. Fleck & Christopher Kilby, 2006. "How Do Political Changes Influence US Bilateral Aid Allocations? Evidence from Panel Data," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 210-223, May.
    7. Conway, Patrick, 1994. "IMF lending programs: Participation and impact," Journal of Development Economics, Elsevier, vol. 45(2), pages 365-391, December.
    8. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 2-16, January.
    9. Cameron, A. Colin & Gelbach, Jonah B. & Miller, Douglas L., 2011. "Robust Inference With Multiway Clustering," Journal of Business & Economic Statistics, American Statistical Association, vol. 29(2), pages 238-249.
    10. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    11. Mr. Alex Mourmouras & Anna Ivanova & Mr. George C Anayiotos & Mr. Wolfgang Mayer, 2003. "What Determines the Implementation of IMF-Supported Programs?," IMF Working Papers 2003/008, International Monetary Fund.
    12. Barry O'neill, 1996. "Power and Satisfaction in the United Nations Security Council," Journal of Conflict Resolution, Peace Science Society (International), vol. 40(2), pages 219-237, June.
    13. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151, December.
    14. Jan‐Egbert Sturm & Helge Berger & Jakob De Haan, 2005. "Which Variables Explain Decisions On Imf Credit? An Extreme Bounds Analysis," Economics and Politics, Wiley Blackwell, vol. 17(2), pages 177-213, July.
    15. 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.
    16. Davidson, Russell & MacKinnon, James G., 1993. "Estimation and Inference in Econometrics," OUP Catalogue, Oxford University Press, number 9780195060119, Decembrie.
    17. Stone, Randall W., 2004. "The Political Economy of IMF Lending in Africa," American Political Science Review, Cambridge University Press, vol. 98(4), pages 577-591, November.
    18. Jean-Pierre Allegret & Philippe Dulbecco, 2007. "The institutional failures of the International Monetary Fund conditionality," Post-Print hal-00193408, HAL.
    19. Kenneth W. Abbott & Duncan Snidal, 1998. "Why States Act through Formal International Organizations," Journal of Conflict Resolution, Peace Science Society (International), vol. 42(1), pages 3-32, February.
    20. Przeworski,Adam & Alvarez,Michael E. & Cheibub,Jose Antonio & Limongi,Fernando, 2000. "Democracy and Development," Cambridge Books, Cambridge University Press, number 9780521793797.
    21. Przeworski, Adam & Vreeland, James Raymond, 2000. "The effect of IMF programs on economic growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 385-421, August.
    22. Craig Volden & Clifford J. Carrubba, 2004. "The Formation of Oversized Coalitions in Parliamentary Democracies," American Journal of Political Science, John Wiley & Sons, vol. 48(3), pages 521-537, July.
    23. Barro, Robert J. & Lee, Jong-Wha, 2005. "IMF programs: Who is chosen and what are the effects?," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1245-1269, October.
    24. J. Broz, 2008. "Congressional voting on funding the international financial institutions," The Review of International Organizations, Springer, vol. 3(4), pages 351-374, December.
    25. Roland Vaubel, 1986. "A public choice approach to international organization," Public Choice, Springer, vol. 51(1), pages 39-57, January.
    26. Robert Trudel, 2005. "Effects of Exchange Rate Regime on IMF Program Participation," Review of Policy Research, Policy Studies Organization, vol. 22(6), pages 919-936, November.
    27. Harrigan, Jane & Wang, Chengang & El-Said, Hamed, 2006. "The economic and political determinants of IMF and world bank lending in the Middle East and North Africa," World Development, Elsevier, vol. 34(2), pages 247-270, February.
    28. Ilyana Kuziemko & Eric Werker, 2006. "How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 905-930, October.
    29. Roland Vaubel, 1996. "Bureaucracy at the IMF and the World Bank: A Comparison of the Evidence," The World Economy, Wiley Blackwell, vol. 19(2), pages 195-210, March.
    30. Przeworski,Adam & Alvarez,Michael E. & Cheibub,Jose Antonio & Limongi,Fernando, 2000. "Democracy and Development," Cambridge Books, Cambridge University Press, number 9780521790321.
    31. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, University Library of Munich, Germany, revised 08 Jan 2004.
    32. Graham Bird & Dane Rowlands, 2006. "IMF quotas: Constructing an international organization using inferior building blocks," The Review of International Organizations, Springer, vol. 1(2), pages 153-171, June.
    33. Marchesi, Silvia, 2003. "Adoption of an IMF programme and debt rescheduling. An empirical analysis," Journal of Development Economics, Elsevier, vol. 70(2), pages 403-423, April.
    34. Thompson, Alexander, 2006. "Coercion Through IOs: The Security Council and the Logic of Information Transmission," International Organization, Cambridge University Press, vol. 60(1), pages 1-34, January.
    35. Voeten, Erik, 2005. "The Political Origins of the UN Security Council's Ability to Legitimize the Use of Force," International Organization, Cambridge University Press, vol. 59(3), pages 527-557, July.
    36. Gene M. Grossman (ed.), 1996. "Economic Growth," Books, Edward Elgar Publishing, volume 0, number 553.
    37. Wolfgang Mayer & Alex Mourmouras, 2008. "IMF conditionality: An approach based on the theory of special interest politics," The Review of International Organizations, Springer, vol. 3(2), pages 105-121, June.
    38. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
    39. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
    40. Chapman, Terrence L., 2009. "Audience Beliefs and International Organization Legitimacy," International Organization, Cambridge University Press, vol. 63(4), pages 733-764, October.
    41. Axel Dreher, 2004. "A Public Choice Perspective of IMF and World Bank Lending and Conditionality," Public Choice, Springer, vol. 119(3_4), pages 445-464, June.
    42. Aleš Bulíř & Soojin Moon, 2004. "Is Fiscal Adjustment More Durable When The IMF is Involved?1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 46(3), pages 373-399, September.
    43. Terrence L. Chapman, 2007. "International Security Institutions, Domestic Politics, and Institutional Legitimacy," Journal of Conflict Resolution, Peace Science Society (International), vol. 51(1), pages 134-166, February.
    44. Roland Vaubel, 2006. "Principal-agent problems in international organizations," The Review of International Organizations, Springer, vol. 1(2), pages 125-138, June.
    45. Kilby, Christopher, 2005. "Donor Influence in MDBs: the Case of the Asian Development Bank," Vassar College Department of Economics Working Paper Series 70, Vassar College Department of Economics.
    46. 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.
    47. Helge Berger & Jakob de Haan & Jan-Egbert Sturm, 2005. "Which Variables Explain Decisions on IMF Credit? An Extreme Bounds Analysis�," TWI Research Paper Series 13, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    48. Kilby, Christopher, 2009. "The political economy of conditionality: An empirical analysis of World Bank loan disbursements," Journal of Development Economics, Elsevier, vol. 89(1), pages 51-61, May.
    49. Xavier Sala-I-Martin & Gernot Doppelhofer & Ronald I. Miller, 2004. "Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach," American Economic Review, American Economic Association, vol. 94(4), pages 813-835, September.
    50. Jean-Pierre Allegret & Philippe Dulbecco, 2007. "The institutional failures of International Monetary Fund conditionality," The Review of International Organizations, Springer, vol. 2(4), pages 309-327, December.
    51. Gilligan, Thomas W & Krehbiel, Keith, 1987. "Collective Decisionmaking and Standing Committees: An Informational Rationale for Restrictive Amendment Procedures," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 287-335, Fall.
    52. Jan-Egbert Sturm & Helge Berger & Jakob de Haan, 2005. "Which Variables Explain Decisions On Imf Credit? An Extreme Bounds Analysis," Economics and Politics, Wiley Blackwell, vol. 17, pages 177-213, July.
    53. Gould, Erica R., 2003. "Money Talks: Supplementary Financiers and International Monetary Fund Conditionality," International Organization, Cambridge University Press, vol. 57(3), pages 551-586, July.
    54. Voeten, Erik, 2001. "Outside Options and the Logic of Security Council Action," American Political Science Review, Cambridge University Press, vol. 95(4), pages 845-858, December.
    55. Angrist, Joshua D, 2001. "Estimations of Limited Dependent Variable Models with Dummy Endogenous Regressors: Simple Strategies for Empirical Practice: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(1), pages 27-28, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2006. "Does Membership on the UN Security Council Influence IMF Decisions? Evidence from Panel Data," CESifo Working Paper Series 1808, CESifo.
    2. Axel Dreher & James Raymond Vreeland, 2011. "Buying Votes and International Organizations," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 78, Courant Research Centre PEG.
    3. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Development aid and international politics: Does membership on the UN Security Council influence World Bank decisions?," Journal of Development Economics, Elsevier, vol. 88(1), pages 1-18, January.
    4. repec:got:cegedp:123 is not listed on IDEAS
    5. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2015. "Politics and IMF Conditionality," Journal of Conflict Resolution, Peace Science Society (International), vol. 59(1), pages 120-148, February.
    6. Axel Dreher & Jan-Egbert Sturm, 2012. "Do the IMF and the World Bank influence voting in the UN General Assembly?," Public Choice, Springer, vol. 151(1), pages 363-397, April.
    7. 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.
    8. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2010. "Does Membership on the UN Security Council Influence IMF Conditionality?," KOF Working papers 10-262, KOF Swiss Economic Institute, ETH Zurich.
    9. Oberdabernig, Doris A., 2013. "Revisiting the Effects of IMF Programs on Poverty and Inequality," World Development, Elsevier, vol. 46(C), pages 113-142.
    10. Bal Gündüz, Yasemin, 2016. "The Economic Impact of Short-term IMF Engagement in Low-Income Countries," World Development, Elsevier, vol. 87(C), pages 30-49.
    11. 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.
    12. Presbitero, Andrea F. & Zazzaro, Alberto, 2012. "IMF Lending in Times of Crisis: Political Influences and Crisis Prevention," World Development, Elsevier, vol. 40(10), pages 1944-1969.
    13. repec:got:cegedp:104 is not listed on IDEAS
    14. Axel Dreher & Katharina Michaelowa, 2008. "The political economy of international organizations," The Review of International Organizations, Springer, vol. 3(4), pages 331-334, December.
    15. Dreher, Axel, 2006. "IMF and economic growth: The effects of programs, loans, and compliance with conditionality," World Development, Elsevier, vol. 34(5), pages 769-788, May.
    16. Dreher, Axel & Walter, Stefanie, 2010. "Does the IMF Help or Hurt? The Effect of IMF Programs on the Likelihood and Outcome of Currency Crises," World Development, Elsevier, vol. 38(1), pages 1-18, January.
    17. Axel Dreher & Stephan Klasen & James Raymond Vreeland & Eric Werker, 2013. "The Costs of Favoritism: Is Politically Driven Aid Less Effective?," Economic Development and Cultural Change, University of Chicago Press, vol. 62(1), pages 157-191.
    18. Luca Papi & Andrea F Presbitero & Alberto Zazzaro, 2015. "IMF Lending and Banking Crises," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 63(3), pages 644-691, November.
    19. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, University Library of Munich, Germany, revised 08 Jan 2004.
    20. Yasemin Bal Gunduz, 2009. "Estimating Demand for IMF Financing by Low-Income Countries in Response to Shocks," IMF Working Papers 2009/263, International Monetary Fund.
    21. Dreher, Axel & Jensen, Nathan M, 2007. "Independent Actor or Agent? An Empirical Analysis of the Impact of U.S. Interests on International Monetary Fund Conditions," Journal of Law and Economics, University of Chicago Press, vol. 50(1), pages 105-124, February.
    22. Andrea F. Presbitero & Alberto Zazzaro, 2010. "IMF Lending in Low- and Middle-Income Countries in the Wake of the Global Crisis," Development Working Papers 305, Centro Studi Luca d'Agliano, University of Milano.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:53:y:2009:i:7:p:742-757. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eer .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.