Table of Contents

Handbook of the International Political Economy of Monetary Relations

Handbook of the International Political Economy of Monetary Relations

Handbooks of Research on International Political Economy series

Edited by Thomas Oatley and W. Kindred Winecoff

This extensive Handbook provides an in-depth exploration of the political economy dynamics associated with the international monetary and financial systems. Leading experts offer a fresh take on research into the interaction between system structure, the self-interest of private firms, the political institutions within which governments make policy, and the ideas that influence beliefs about appropriate policy responses. Crucially they also assess how these factors have shaped the political economy of various facets of monetary and financial systems.

Chapter 21: IMF programs: participation, implementation, and effects

Graham Bird and Dane Rowlands

Subjects: economics and finance, political economy, politics and public policy, international politics, political economy, public policy


The International Monetary Fund (IMF or 'the Fund') is the world's premier international financial institution with 188 member countries spanning all parts of the world and all income levels from the poorest to the richest. It has multilateral and bilateral functions which cover both adjustment and financing issues. There are numerous aspects of the Fund's activities that have stimulated research and policy discussion and there is a large literature on its role and operations. Survey articles already exist that attempt to review the principal issues involved (see, e.g., Bird 2007). In this chapter our focus is considerably narrower. We concentrate on the IMF's bilateral relationship with member countries in the context of IMF (or IMF-supported) programs. In essence, we organize our discussion around the 'life cycle' of IMF programs (Bird and Rowlands 2003). In this context we first examine the factors that influence participation in them. We then move on to look at the extent to which the conditions that such programs embody are implemented. Next we investigate the effects of programs across a range of macroeconomic variables as well as their 'catalytic effect' on the propensity of private international capital markets and aid donors to lend. We also briefly discuss what happens in the period that follows an IMF program and examine whether countries graduate from the Fund or exhibit recidivist tendencies, returning to it to set up another program.

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