Stone: The Scope of IMF Conditionality

Stone, RW. 2008. The Scope of IMF Conditionality. International Organization 62, no. 04: 589-620.

Is the IMF autonomous, controlled by the hegemon, or something else?
Two models are tested regarding IMF conditionality: A public-choice model and an informal governance model. "Public-choice critics argue that the Fund is an out-of-control agency that seeks to maximize its importance by imposing the highest levels of conditionality the market will bear. To the contrary, we find that the Fund has refrained from exploiting the vulnerability of particular countries to maximize the scope of conditionality. Alternatively, critics of major-power influence in the IMF claim that conditionality reflects the interests of the major shareholders rather than the needs of borrowing countries. We find evidence of US influence, which operates to constrain conditionality, but only in vulnerable countries that are important recipients of US aid. In ordinary countries under ordinary circumstances, broad authority is delegated to the Fund, which adjusts conditionality to accommodate local circumstances and domestic political opposition" (from abstract).

Some of the standard critiques of the IMF is that it is either a rogue institution imposing its will on sovereign states, or it is a tool of the most powerful states. Which of these is true, as they are mutually exclusive?

They don't find evidence for the rogue IO explanation, which are, "...derived from a public choice perspective" (1). "The puzzle that the power politics school is unable to explain is why weaker states participate in international organizations, if their policies simply reflect the preferences of the powerful. In order for institutions to be useful to powerful states, they must elicit voluntary participation, which means that there must be sufficient agreement about common purposes that weaker states can expect to benefit from cooperation" (1-2).

"We develop an alternative view, which we call informal governance. International organizations operate according to two parallel sets of rules: formal rules, which embody consensual procedures, and informal rules, which allow exceptional access for powerful countries. In this view, the danger embodies in delegation is not that the agency will run out of control, but that it will be captured by the most powerful state in the system" (2).

A history of IMF autonomy is covered.

"Our conclusions support our model of informal governance and are inconsistent with the public-choice inspired model of bureaucratic rent seeking" (41). The US is a major impact on IMF policies, especially when correlated with US aid giving.