IMF STRUCTURAL CONDITIONALITY AND SPECIAL INTEREST GROUPS: DETERMINANTS OF PROGRAM IMPLEMENTATION IN LABOR MARKET AND FINANCIAL SECTOR

摘要

What accounts for the differences in implementation of IMF programs across countries and across policy areas? Why do some countries are more effective in implementing IMF reforms than others, and in some policy areas than others? In this dissertation project, I argue that one of the most important sources of this heterogeneity in implementation lies in the strength of organized interests who are adversely affected by specific policies and their interaction with their governments. Specifically, I examine how partisan differences in the borrowing country governments and their electoral concerns mediate the effect of organized interests in the implementation of IMF reforms. Departing from common practice in the literature, I use a disaggregated approach to study implementation. With a novel global dataset, constructed from the Fund’s MONA database, I analyze implementation in two specific policy areas: labor market and financial sector reforms, in which preferences of organized interests and their linkages to the different partisan governments can be drawn from the existing literature. The results provide strong evidence regarding the interactive effect of special interests and partisanship. Analysis of the implementation of labor market reforms show that these reforms are driven by partisan preferences, electoral concerns and the interaction between the borrowing country governments and labor unions. When faced with an increasing number of strikes, left-wing governments are more likely to implement labor market reforms in non-election years than center/right wing governments. However, the left is less likely than the center/right to fulfill its international commitments when labor groups are militant during election years. Unlike labor market reforms, the effect of the financial sector is not necessarily mediated by the partisan politics and democratic institutions in the implementation stage due to lack of broader electoral appeal and mobilization capacity. The implementation of financial sector conditionality significantly goes down in the presence of strong financial interests, irrespective of the regime type and partisan ideology. This dissertation also provides two detailed case studies: the recent Fund programs in Ireland and Greece, focusing on the politics of reform in these countries and further highlighting the empirical findings.