The influence of financial corporations on IMF lending: Has it changed with the global financial crisis?

Dr. Lena Lee Andresen



JEL classification
F33, F34, F53, G15

Conditionality, global finance, IMF, political economy


The global financial crisis of 2007-2008 might constitute another structural change in IMF lending after the Latin American debt crisis and the end of the Cold War. Using a panel dataset of 120 countries with IMF programmes from 1993 to 2016, I find that with the crisis, the importance of financial corporations in IMF lending decisions has risen as major IMF shareholders seek to protect the exposure of their banks, which increased strongly in the years before the crisis. To impress global financial markets, they influence programme design towards more money and more conditions, specifically prior actions. This serves to keep the programme country's market access and avoid default. While financial corporate interests are also associated with a larger programme size for all countries, a positive link with more conditions is only found for countries for which market access matters. For countries with limited market access, IMF staff's technocratic interest in limited conditionality dominates.