The Review of International Organizations

, Volume 8, Issue 2, pp 265–290 | Cite as

“The silent revolution:” How the staff exercise informal governance over IMF lending

Article

Abstract

This paper examines how the staff exercise informal governance over lending decisions of the International Monetary Fund (IMF or Fund). The essential component of designing any IMF program, assessing the extent to which a borrowing country is likely to fulfill its policy commitments, is based partly on informal staff judgments subject to informal incentives and normative orientations not dictated by formal rules and procedures. Moreover, when country officials are unable to commit to policy goals of the IMF, the IMF staff may bypass the formal channel of policy dialogue through informal contacts and negotiations with more like-minded actors outside the policymaking process. Exercising informal governance in these ways, the staff are motived by informal career advancement incentives and normative orientations associated with the organization’s culture to provide favorable treatment to borrowers composed of policy teams sympathetic toward their policy goals. The presence of these sympathetic interlocutors provides the staff both with greater confidence a lending program will achieve success and an opportunity to support officials who share their policy beliefs. I assess these arguments using a new dataset that proxies shared policy beliefs based on the professional characteristics of IMF staff and developing country officials. The evidence supports these arguments: larger loan commitments are extended to countries where government officials and the Fund staff share similar professional training. The analysis implies informal governance operates in IOs not just via state influence but also through the evolving makeup, incentive structure, and normative orientations of their staffs.

Keywords

IMF Organizational culture Professional training 

JEL

F53 F33 

Supplementary material

11558_2012_9154_MOESM1_ESM.pdf (156 kb)
ESM 1(PDF 155 kb)
11558_2012_9154_MOESM2_ESM.pdf (108 kb)
ESM 2(PDF 108 kb)
11558_2012_9154_MOESM3_ESM.dta (159 kb)
ESM 3(DTA 159 kb)

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Copyright information

© Springer Science+Business Media New York 2012

Authors and Affiliations

  1. 1.Department of International RelationsLondon School of EconomicsLondonUK

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