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Professional ties that bind: how normative orientations shape IMF conditionality

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  • Jeffrey M. Chwieroth

Abstract

Staff play a key part in designing IMF conditionality, and yet the literature provides a narrow view of their motivations. This article shows how the design of IMF conditionality is linked to the normative orientations of the staff and their common professional training. Professional ties from similar training help to bind the staff together around a shared set of normative orientations that inform the IMF's policy goals. When borrowing-country officials do not share these orientations, the staff are motivated to tighten conditionality. This behaviour also fits with staff concerns about time-inconsistency and moral hazard. I find robust statistical support for this argument using a dataset based on the professional ties that exist between the IMF staff and borrowing-country officials. Yet conditionality is not found to be more lenient when country officials share the normative orientations of the IMF staff. Staff concerns about time-inconsistent preferences and moral hazard likely weigh against more lenient treatment where normative adherence is stronger.

Suggested Citation

  • Jeffrey M. Chwieroth, 2015. "Professional ties that bind: how normative orientations shape IMF conditionality," Review of International Political Economy, Taylor & Francis Journals, vol. 22(4), pages 757-787, August.
  • Handle: RePEc:taf:rripxx:v:22:y:2015:i:4:p:757-787
    DOI: 10.1080/09692290.2014.898214
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    References listed on IDEAS

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    1. Michael Mussa & Miguel Savastano, 2000. "The IMF Approach to Economic Stabilization," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 79-128, National Bureau of Economic Research, Inc.
    2. Jeffrey M. Chwieroth, 2010. "Capital Ideas: The IMF and the Rise of Financial Liberalization," Economics Books, Princeton University Press, edition 1, number 9087.
    3. David Colander, 2008. "The Making of a Global European Economist," Kyklos, Wiley Blackwell, vol. 61(2), pages 215-236, May.
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    Cited by:

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    2. Stephen B. Kaplan & Sujeong Shim, 2020. "The IMF's Financial Catch 22: Global Banker or Lender of Last Resort?," Working Papers 2020-18, The George Washington University, Institute for International Economic Policy.
    3. 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.
    4. Silano, Filippo, 2023. "Career paths of Ministry of Finance advisers," ILE Working Paper Series 73, University of Hamburg, Institute of Law and Economics.
    5. Richard Clark & Lindsay R. Dolan, 2021. "Pleasing the Principal: U.S. Influence in World Bank Policymaking," American Journal of Political Science, John Wiley & Sons, vol. 65(1), pages 36-51, January.
    6. 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.
    7. Tim Marple, 2021. "The social management of complex uncertainty: Central Bank similarity and crisis liquidity swaps at the Federal Reserve," The Review of International Organizations, Springer, vol. 16(2), pages 377-401, April.
    8. Stephen Kaplan & Sujeong Shim, 2021. "Global Contagion and IMF Credit Cycles: A Lender of Partial Resort?," Working Papers 2021-13, The George Washington University, Institute for International Economic Policy.

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