IMF surveillance and financial markets—A political economy analysis

Abstract

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Incoherence in Regime Complexes: A Sentiment Analysis of EU‐IMF Surveillance

“…This analysis has the advantage of distinguishing between the nature and content of the obligation imposed on member states, but it deals with just two categories – differences between Commission and Council texts and the precision of Commission recommendations – and so loses much of the semantic nuance in EU surveillance efforts. Turning to the literature on the IMF, Fratzscher and Reynaud () perform a content analysis of all PINs for a group of emerging markets over the period 1996–2007. Each document in this corpus is coded according to its ‘favorableness' towards national economic policies.…”

The politics of external approval: Explaining the IMF's evaluation of austerity programmes

“…These studies have found a low explanatory power of political strategies and macroeconomic variables, while quite unambiguously suggesting that the IMF both legitimises its lending activities with overly optimistic forecasts and favours countries that are political allies of the United States (Aldenhoff ; Dreher et al ). In emerging market economies, the countries’ political power has also proven relevant (Fratzscher & Reynaud ).…”

IMF Surveillance of Ireland during the Celtic Tiger

“…Similarly, Woods and Domenico (2008) AQ1 ¶ found that the IMF will have more leverage with borrowing countries. However, a recent empirical study has cast some doubt on this argument, finding that the IMF tends to engage in 'defensive surveillance' by providing consistently more favourable reports for countries with larger IMF loans outstanding (Fratzscher & Reynaud, 2011). The same study also found that financial markets react more favourably to consultations that praise emerging markets that are better represented at the IMF's Executive Board.…”