A Two-Level Principal-Agent Model of IMF Lending: The Turkish Case
Graduate Institute of International and Development Studies (IHEID)
APSA 2012 Annual Meeting Paper
The literature examining the institutional aspects of the IMF can be grouped under two categories: state-centric and public choice approaches. The state-centric approach focuses on the influence of the powerful states in explaining the variation in the conditionalities of IMF loans, whereas public choice approaches put a greater emphasis on the intellectual dominance of the IMF staff. However, neither of these approaches fully explains the variation as they neglect the impact of the relation between the Executive Board, the IMF staff and the recipient country, on the decision-making of the institution. This paper presents a research project attempting to analyze the variations in IMF conditionalities through building a new conceptual framework. By focusing on the case study and theory dimensions that elucidate the puzzle of the research, the paper introduces a “Two-Level P-A Model” of IMF lending with hypotheses that will be tested using a single country study, namely the Turkish case.
Keywords: IMF, SAPs, Conditionality, P-A theory, Turkish economy
JEL Classification: F33
Date posted: July 14, 2012 ; Last revised: April 9, 2014