Formal governance matters: when, how, and why states act on the IMF Executive Board

International financial institutions (IFIs) are central actors shaping global development. Scholarship on these institutions’ governance has primarily explored unequal voting rights and informal channels of decision-making. Much less is known about the actual decision-making processes that transpire in the IFIs’ formal governance structures, where votes are rarely taken. This article redirects academic scrutiny to these structures to reveal hitherto unobserved state behavior. Empirically, we examine decision-making at the International Monetary Fund (IMF), a key actor in the diffusion of market-oriented reforms. We introduce a novel dataset systematizing all comments of IMF Executive Board members over 3,111 developing-country-specific discussions between 1995 and 2015. First, regression analysis reveals that the interventions by the IMF’s most powerful member-states—the United States, Germany, Japan, France, and the United Kingdom—correlate with their bilateral trade and aid interests. Second, these countries frequently reference each other in debates, demonstrating how coalitions work in practice. Third, we find that the preferences they express for market liberalization vis-à-vis countries in the Global South are associated with an increase in market-liberalizing conditions in subsequent lending programs. Taken together, this article reveals the usefulness of examining formal deliberations in IFIs, contributing to a fuller understanding of decision-making processes in the international political economy.