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

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

Abstract

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
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    Cited by:

    1. 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.
    2. repec:spr:revint:v:12:y:2017:i:3:d:10.1007_s11558-016-9260-1 is not listed on IDEAS
    3. Rickard, Stephanie J. & Caraway, Teri L., 2018. "International demands for austerity: examining the impact of the IMF on the public sector," LSE Research Online Documents on Economics 86636, London School of Economics and Political Science, LSE Library.
    4. 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).
    5. 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.
    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.
    8. repec:cep:stieop:48 is not listed on IDEAS

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