Leiden University Student Repository

Thiel, Taco van (2023)

IMF programme efficacy: The negative impact of the economic importance of states

Bachelor thesis | Politicologie (BSc)

The International Monetary Fund has often been criticised on account of its tendency to be lenient in loan conditionality to certain countries that it considers important. This research seeks to narrow in on the effect of economic importance from the perspective of western donor states on IMF loan efficacy. Apart from providing a gap in the research, this topic is deemed important because of its value for developmental economics and upcoming issues in that field. Moreover, the results allow concrete policy decisions to be made. Employing a bivariate and multiple linear regression analysis, this paper seeks to answer the question what is the effect of the perceived economic importance of states for western actors on the efficacy of loans by the IMF? In foreshadowing results, this paper finds that a higher economic importance, and high rates of accountability and corruption, lead to a lower efficacy of IMF loans. It is argued that this is the case because of the moral hazard issue,...Show moreThe International Monetary Fund has often been criticised on account of its tendency to be lenient in loan conditionality to certain countries that it considers important. This research seeks to narrow in on the effect of economic importance from the perspective of western donor states on IMF loan efficacy. Apart from providing a gap in the research, this topic is deemed important because of its value for developmental economics and upcoming issues in that field. Moreover, the results allow concrete policy decisions to be made. Employing a bivariate and multiple linear regression analysis, this paper seeks to answer the question what is the effect of the perceived economic importance of states for western actors on the efficacy of loans by the IMF? In foreshadowing results, this paper finds that a higher economic importance, and high rates of accountability and corruption, lead to a lower efficacy of IMF loans. It is argued that this is the case because of the moral hazard issue, time-inconsistency problem, and the structure of the IMF. The model does however lack full robustness.Show less

IMF

Political economy

Oil

Conditionality

Author

Thiel, Taco van

Faculty

Faculty of Social & Behavioural Sciences

Specialisation

International Relations and Organisations

Supervisors

Demarest, L

ECTS Credits

20

Language

en