Refracting conditionality: IMF programs and domestic politics during the Latin American debt crisis and the post-communist transition

This dissertation analyzes the domestic and international roots of the profound economic transformations that have affected developing countries in the last two decades, as seen through the lens of the politics of IMF programs. The pervasiveness of IMF interventions in the developing world in the last two decades confirms the widespread view of the Fund as a key promoter of neoliberal economic reforms. At the same time, however, the frequency of IMF program breakdown questions the effectiveness of such external policy pressures and suggests that domestic politics can refract the effects of IMF conditionality in driving economic reforms. Therefore, this dissertation analyzes the interaction of external pressures and domestic political and institutional constraints in IMF programs during two of the most important recent episodes of economic adjustment: the debt crisis in Latin America and the post-communist transition in the former Soviet bloc.; The dissertation develops a formal model of the interaction between the IMF and the program country government subject to domestic and international political constraints. The formal model's predictions are tested statistically for the two regions, and the analysis is supplemented by empirical evidence from four countries in each of the two regions: Bolivia, Peru, Argentina, and Chile in the 1980s, and Slovakia, Moldova, Romania, and Bulgaria during in the 1990s.; The dissertation reveals the importance of looking not only at a variety of individual factors---economic crisis, Western political considerations, the preferences of domestic political actors, and the country's institutional setting---but also at the complex interactions between them in driving IMF program dynamics. For example, I find that external financial need raises the likelihood of program initiation to a much greater extent for economically important countries. Similarly, in Latin America higher inflation made right governments more likely and left governments less likely to enter IMF agreements, whereas for the transition economies high inflation drove program initiation for all governments, but to a larger extent for ex-communist ones. Finally, higher degrees of democracy and government fragmentation have a more negative effect of compliance when a pro-reform government faced an anti-reform opposition.