IDEAS home Printed from
   My bibliography  Save this article

International Negotiations and Domestic Politics: The Case of IMF Labor Market Conditionality


  • Caraway, Teri L.
  • Rickard, Stephanie J.
  • Anner, Mark S.


What is the role of international organizations (IOs) in the formulation of domestic policy, and how much influence do citizens have in countries' negotiations with IOs? We examine these questions through a study of labor-related conditionality in International Monetary Fund (IMF) loans. Using new data from IMF loan documents for programs from 1980 to 2000, we test to see if citizens' economic interests influence IMF conditionality. We examine the substance of loan conditions and identify those that require liberalization in the country's domestic labor market or that have direct effects on employment, wages, and social benefits. We find evidence that democratic countries with stronger domestic labor receive less intrusive labor-related conditions in their IMF loan programs. We argue that governments concerned about workers' opposition to labor-related loan conditions negotiate with the IMF to minimize labor conditionality. We find that the IMF is responsive to domestic politics and citizens' interests.

Suggested Citation

  • Caraway, Teri L. & Rickard, Stephanie J. & Anner, Mark S., 2012. "International Negotiations and Domestic Politics: The Case of IMF Labor Market Conditionality," International Organization, Cambridge University Press, vol. 66(01), pages 27-61, January.
  • Handle: RePEc:cup:intorg:v:66:y:2012:i:01:p:27-61_00

    Download full text from publisher

    File URL:
    File Function: link to article abstract page
    Download Restriction: no

    References listed on IDEAS

    1. Chinn, Menzie D. & Ito, Hiro, 2006. "What matters for financial development? Capital controls, institutions, and interactions," Journal of Development Economics, Elsevier, vol. 81(1), pages 163-192, October.
    2. Antonio Fatás & Ilian Mihov & Andrew K. Rose, 2007. "Quantitative Goals for Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(5), pages 1163-1176, August.
    3. Keefer, Philip & Stasavage, David, 2002. "Checks and Balances, Private Information, and the Credibility of Monetary Commitments," International Organization, Cambridge University Press, vol. 56(04), pages 751-774, September.
    4. Guillermo A. Calvo & Carmen M. Reinhart, 2002. "Fear of Floating," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 379-408.
    5. Hausmann, Ricardo & Panizza, Ugo & Stein, Ernesto, 2001. "Why do countries float the way they float?," Journal of Development Economics, Elsevier, vol. 66(2), pages 387-414, December.
    6. Carmen M. Reinhart & Kenneth S. Rogoff, 2004. "The Modern History of Exchange Rate Arrangements: A Reinterpretation," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 1-48.
    7. Eduardo Levy-Yeyati & Federico Sturzenegger, 2003. "To Float or to Fix: Evidence on the Impact of Exchange Rate Regimes on Growth," American Economic Review, American Economic Association, vol. 93(4), pages 1173-1193, September.
    8. Arellano, Manuel, 1993. "On the testing of correlated effects with panel data," Journal of Econometrics, Elsevier, vol. 59(1-2), pages 87-97, September.
    9. Barry Eichengreen & Raul Razo-Garcia, 2006. "The international monetary system in the last and next 20 years," Economic Policy, CEPR;CES;MSH, vol. 21(47), pages 393-442, July.
    10. Clemens Kool & Alex Lammertsma, 2005. "Inflation Persistence under Semi-Fixed Exchange Rate Regimes: The European Evidence 1974–1998," Open Economies Review, Springer, vol. 16(1), pages 51-76, January.
    11. Bernhard, William & Broz, J. Lawrence & Clark, William Roberts, 2002. "The Political Economy of Monetary Institutions," International Organization, Cambridge University Press, vol. 56(04), pages 693-723, September.
    12. Maurice Obstfeld & Kenneth Rogoff, 1995. "The Mirage of Fixed Exchange Rates," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 73-96, Fall.
    13. Broz, J. Lawrence, 2002. "Political System Transparency and Monetary Commitment Regimes," International Organization, Cambridge University Press, vol. 56(04), pages 861-887, September.
    14. Canavan, Chris & Tommasi, Mariano, 1997. "On the credibility of alternative exchange rate regimes," Journal of Development Economics, Elsevier, vol. 54(1), pages 101-122, October.
    15. Herrendorf, Berthold, 1999. "Transparency, reputation, and credibility under floating and pegged exchange rates," Journal of International Economics, Elsevier, vol. 49(1), pages 31-50, October.
    16. Frieden, Jeffry A., 1991. "Invested interests: the politics of national economic policies in a world of global finance," International Organization, Cambridge University Press, vol. 45(04), pages 425-451, September.
    17. repec:hrv:faseco:34721963 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Blanton, Robert G. & Blanton, Shannon Lindsey & Peksen, Dursun, 2015. "Financial Crises and Labor: Does Tight Money Loosen Labor Rights?," World Development, Elsevier, vol. 76(C), pages 1-12.
    2. Guimarães, Bernardo de Vasconcellos & Ladeira, Carlos Eduardo de Almeida, 2015. "The determinants of IMF fiscal conditionalities: economics or politics?," Textos para discussão 391, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    3. repec:cep:stieop:48 is not listed on IDEAS
    4. 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.
    5. repec:spr:revint:v:12:y:2017:i:3:d:10.1007_s11558-016-9260-1 is not listed on IDEAS
    6. Soumyajit Mazumder, 2016. "Can I stay a BIT longer? The effect of bilateral investment treaties on political survival," The Review of International Organizations, Springer, vol. 11(4), pages 477-521, December.
    7. Lang, Valentin, 2016. "The Economics of the Democratic Deficit: The Effect of IMF Programs on Inequality," Working Papers 0617, University of Heidelberg, Department of Economics.

    More about this item


    Access and download statistics


    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:cup:intorg:v:66:y:2012:i:01:p:27-61_00. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.