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Economic stabilization, conditionality, and political stability

Published online by Cambridge University Press:  22 May 2009

Henry S. Bienen and
Mark Gersovitz
Henry S. Bienen
Affiliation:
James S. McDonnell Distinguished University Professor of Politics and International Affairs and Director of the Center of International Studies at Princeton University, Princeton, New Jersey.
Mark Gersovitz
Affiliation:
Senior Research Economist in the Woodrow Wilson School of Public and International Affairs at Princeton University, Princeton, New Jersey.
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Abstract

IMF conditionality is seldom so important that it dominates all other considerations for political stability. IMF stabilization programs often shift benefits from one group to another. They expose elites to charges of selling the sovereignty of their countries. The imposition of IMF conditions, particularly subsidy cuts, may lead to sharp outbreaks of civil disorder. Nonetheless, the IMF provides resources that make adjustment easier and thus may lessen the chances of political instability for a country. IMF programs are seldom implemented fully as negotiated, and the penalties for partial compliance are not great. Debtor countries have more flexibility in imposing austerity measures, and the economic constraints are less binding than often assumed. The very availability of alternatives to IMF programs results in internal divisions because some favor debt repudiation and others oppose it. Groups now contend over solutions to the debt problems of their countries.

Information

Type
Global Debt and National Policy
Information
International Organization , Volume 39 , Issue 4 , Autumn 1985, pp. 729 - 754
Copyright
Copyright © The IO Foundation 1985

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References

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