IDEAS home Printed from https://ideas.repec.org/p/kof/wpskof/05-118.html
   My bibliography  Save this paper

Independent Actor or Agent? An Empirical Analysis of the Impact of US Interests on IMF Conditions

Author

Listed:
  • Axel Dreher
  • Nathan Jensen

Abstract

In this paper we analyze whether IMF conditionality is exclusively designed in line with observable economic indicators or, alternatively, whether it is partly driven by its major shareholder, the US. A panel data analysis of 206 letters of intent from 38 countries over the period 4/1997-2/2003 reveals that the number of conditions on an IMF loan depends on a borrowing country's voting pattern in the UN General Assembly. Closer allies of the United States (and other G7 countries) receive IMF loans with fewer conditions especially prior to elections. These results contribute to the current public policy debates on the role and process of setting IMF conditions, and provide broader insights into the influence of the United States and other G7 countries in international institutions.

Suggested Citation

  • Axel Dreher & Nathan Jensen, 2005. "Independent Actor or Agent? An Empirical Analysis of the Impact of US Interests on IMF Conditions," KOF Working papers 05-118, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:05-118
    DOI: 10.3929/ethz-a-005104885
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.3929/ethz-a-005104885
    Download Restriction: no
    File URL: https://libkey.io/10.3929/ethz-a-005104885?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Vreeland,James Raymond, 2003. "The IMF and Economic Development," Cambridge Books, Cambridge University Press, number 9780521016957.
    2. Roland Vaubel & Axel Dreher & Uğurlu Soylu, 2007. "Staff growth in international organizations: A principal-agent problem? An empirical analysis," Public Choice, Springer, vol. 133(3), pages 275-295, December.
    3. Morris Goldstein, 2017. "IMF Structural Programs," World Scientific Book Chapters, in: TRADE CURRENCIES AND FINANCE, chapter 16, pages 553-638, World Scientific Publishing Co. Pte. Ltd..
    4. 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.
    5. Martin, Lisa L., 1992. "Interests, power, and multilateralism," International Organization, Cambridge University Press, vol. 46(4), pages 765-792, October.
    6. Grieco, Joseph M., 1988. "Anarchy and the limits of cooperation: a realist critique of the newest liberal institutionalism," International Organization, Cambridge University Press, vol. 42(3), pages 485-507, July.
    7. Richard Swedberg, 1986. "The Doctrine of Economic Neutrality of the IMF and the World Bank," Journal of Peace Research, Peace Research Institute Oslo, vol. 23(4), pages 377-390, December.
    8. 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.
    9. Dreher, Axel, 2002. "The development and implementation of IMF and World Bank conditionality," HWWA Discussion Papers 165, Hamburg Institute of International Economics (HWWA).
    10. Graham Bird & Dane Rowlands, 2003. "Political Economy Influences Within the Life‐Cycle of IMF Programmes," The World Economy, Wiley Blackwell, vol. 26(9), pages 1255-1278, September.
    11. Hammond, Thomas H & Knott, Jack H, 1996. "Who Controls the Bureaucracy?: Presidential Power, Congressional Dominance, Legal Constraints, and Bureaucratic Autonomy in a Model of Multi-institutional Policy-Making," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 12(1), pages 119-166, April.
    12. Axel Dreher & Roland Vaubel, 2004. "The Causes and Consequences of IMF Conditionality," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(3), pages 26-54, May.
    13. Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 55(1), pages 1-16.
    14. Mueller,Dennis C. (ed.), 1997. "Perspectives on Public Choice," Cambridge Books, Cambridge University Press, number 9780521553773.
    15. 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.
    16. 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.
    17. 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.
    18. Rogoff, Kenneth, 1990. "Equilibrium Political Budget Cycles," American Economic Review, American Economic Association, vol. 80(1), pages 21-36, March.
    19. 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.
    20. Axel Dreher, 2003. "The influence of elections on IMF programme interruptions," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 101-120.
    21. Roland Vaubel, 2006. "Principal-agent problems in international organizations," The Review of International Organizations, Springer, vol. 1(2), pages 125-138, June.
    22. Allan Meltzer, 2006. "Reviving the Bank and Fund," The Review of International Organizations, Springer, vol. 1(1), pages 49-59, March.
    23. Boockmann, Bernhard & Dreher, Axel, 2003. "The contribution of the IMF and the World Bank to economic freedom," European Journal of Political Economy, Elsevier, vol. 19(3), pages 633-649, September.
    24. Axel Dreher, 2005. "Does the IMF Influence Fiscal and Monetary Policy?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(3), pages 225-238.
    25. McCubbins, Mathew D & Noll, Roger G & Weingast, Barry R, 1987. "Administrative Procedures as Instruments of Political Control," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 243-277, Fall.
    26. Axel Dreher, 2004. "The Influence of IMF Programs on the Re‐election of Debtor Governments," Economics and Politics, Wiley Blackwell, vol. 16(1), pages 53-76, March.
    27. 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.
    28. 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.
    29. Alesina, Alberto & Tabellini, Guido, 1988. "Credibility and politics," European Economic Review, Elsevier, vol. 32(2-3), pages 542-550, March.
    30. 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.
    31. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    32. Michael Mussa, 2002. "Argentina and the Fund: From Triumph to Tragedy," Peterson Institute Press: Policy Analyses in International Economics, Peterson Institute for International Economics, number pa67, February.
    33. Axel Dreher & Roland Vaubel, 2004. "Do IMF and IBRD Cause Moral Hazard and Political Business Cycles? Evidence from Panel Data," Open Economies Review, Springer, vol. 15(1), pages 5-22, January.
    34. 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.
    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. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.
    9. Axel Dreher, 2009. "IMF conditionality: theory and evidence," Public Choice, Springer, vol. 141(1), pages 233-267, October.
    10. Axel Dreher, 2005. "Does the IMF Influence Fiscal and Monetary Policy?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 8(3), pages 225-238.
    11. Marchesi, Silvia & Sabani, Laura, 2007. "IMF concern for reputation and conditional lending failure: Theory and empirics," Journal of Development Economics, Elsevier, vol. 84(2), pages 640-666, November.
    12. repec:got:cegedp:104 is not listed on IDEAS
    13. Chletsos, Michael & Sintos, Andreas, 2021. "Hide and seek: IMF intervention and the shadow economy," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 292-319.
    14. Graham Bird, 2007. "The Imf: A Bird'S Eye View Of Its Role And Operations," Journal of Economic Surveys, Wiley Blackwell, vol. 21(4), pages 683-745, September.
    15. 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.
    16. 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.
    17. Axel Dreher & Roland Vaubel, 2004. "The Causes and Consequences of IMF Conditionality," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(3), pages 26-54, May.
    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. Thomas Stubbs & Bernhard Reinsberg & Alexander Kentikelenis & Lawrence King, 2020. "How to evaluate the effects of IMF conditionality," The Review of International Organizations, Springer, vol. 15(1), pages 29-73, January.
    20. Mr. Calixte Ahokpossi & Laurence Allain & Giovanna Bua, 2014. "A Constrained Choice? Impact of Concessionality Requirements on Borrowing Behavior," IMF Working Papers 2014/176, International Monetary Fund.
    21. Glen Biglaiser & Karl DeRouen, 2011. "How soon is now? The effects of the IMF on economic reforms in Latin America," The Review of International Organizations, Springer, vol. 6(2), pages 189-213, July.

    More about this item

    Keywords

    IMF; Conditionality; Elections; UN General Assembly voting compliance;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

    Statistics

    Access and download statistics

    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:kof:wpskof:05-118. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/koethch.html .

    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.