Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/288993 
Authors: 
Year of Publication: 
2020
Citation: 
[Journal:] The Review of International Organizations [ISSN:] 1559-744X [Volume:] 16 [Issue:] 3 [Publisher:] Springer US [Place:] New York, NY [Year:] 2020 [Pages:] 599-623
Publisher: 
Springer US, New York, NY
Abstract: 
Does the International Monetary Fund (IMF) increase inequality? To answer this question, this article introduces a new empirical strategy for determining the effects of IMF programs that exploits the heterogeneous effect of IMF liquidity on loan allocation based on a difference-in-differences logic. The results show that IMF programs increase income inequality. An analysis of decile-specific income data shows that this effect is driven by absolute income losses for the poor and not by income gains for the rich. The effect persists for up to 5 years, and is stronger for IMF programs in democracies, and when policy conditions, particularly those that demand social-spending cuts and labor-market reforms, are more extensive. These results suggest that IMF programs can constrain government responsiveness to domestic distributional preferences.
Subjects: 
International Monetary Fund (IMF)
Inequality
JEL: 
F53
O19
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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