Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/77689
Authors: 
Dreher, Axel
Sturm, Jan-Egbert
Vreeland, James Raymond
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4308
Abstract: 
Bailouts sponsored by the International Monetary Fund (IMF) are famous for their conditionality: in return for continued installments of desperately needed loans, governments must comply with austere policy changes. Many have suggested, however, that politically important countries face rather weak stringency. Obstacles to testing this hypothesis include finding a measure of political importance that is not plagued by endogeneity and obtaining data on IMF conditionality. We propose to measure political importance using temporary membership on the United Nations Security Council and analyze a newly available dataset on the level of conditionality attached to (a maximum of) 314 IMF arrangements with 101 countries over the 1992 to 2008 period. We find a negative relationship: Security Council members receive about 30 percent fewer conditions. This suggests that the major shareholders of the IMF trade softer conditionality in return for political influence over the Security Council.
Subjects: 
IMF
UN Security Council
voting
aid
conditionality
JEL: 
O19
O11
F35
Document Type: 
Working Paper

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