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“The silent revolution:” How the staff exercise informal governance over IMF lending

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  • Jeffrey Chwieroth

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Abstract

This paper examines how the staff exercise informal governance over lending decisions of the International Monetary Fund (IMF or Fund). The essential component of designing any IMF program, assessing the extent to which a borrowing country is likely to fulfill its policy commitments, is based partly on informal staff judgments subject to informal incentives and normative orientations not dictated by formal rules and procedures. Moreover, when country officials are unable to commit to policy goals of the IMF, the IMF staff may bypass the formal channel of policy dialogue through informal contacts and negotiations with more like-minded actors outside the policymaking process. Exercising informal governance in these ways, the staff are motived by informal career advancement incentives and normative orientations associated with the organization’s culture to provide favorable treatment to borrowers composed of policy teams sympathetic toward their policy goals. The presence of these sympathetic interlocutors provides the staff both with greater confidence a lending program will achieve success and an opportunity to support officials who share their policy beliefs. I assess these arguments using a new dataset that proxies shared policy beliefs based on the professional characteristics of IMF staff and developing country officials. The evidence supports these arguments: larger loan commitments are extended to countries where government officials and the Fund staff share similar professional training. The analysis implies informal governance operates in IOs not just via state influence but also through the evolving makeup, incentive structure, and normative orientations of their staffs. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Jeffrey Chwieroth, 2013. "“The silent revolution:” How the staff exercise informal governance over IMF lending," The Review of International Organizations, Springer, vol. 8(2), pages 265-290, June.
  • Handle: RePEc:spr:revint:v:8:y:2013:i:2:p:265-290
    DOI: 10.1007/s11558-012-9154-9
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    References listed on IDEAS

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    1. repec:spr:revint:v:12:y:2017:i:2:d:10.1007_s11558-017-9270-7 is not listed on IDEAS
    2. repec:spr:revint:v:12:y:2017:i:4:d:10.1007_s11558-017-9286-z is not listed on IDEAS
    3. repec:eee:deveco:v:130:y:2018:i:c:p:1-16 is not listed on IDEAS
    4. Axel Dreher & Katharina Michaelowa, 2008. "The political economy of international organizations," The Review of International Organizations, Springer, vol. 3(4), pages 331-334, December.
    5. Strand, Jonathan R. & Zappile, Tina M., 2015. "Always Vote for Principle, Though You May Vote Alone: Explaining United States Political Support for Multilateral Development Loans," World Development, Elsevier, vol. 72(C), pages 224-239.

    More about this item

    Keywords

    IMF; Organizational culture; Professional training; F53; F33;

    JEL classification:

    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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