The economics of the democratic deficit: the effect of IMF programs on inequality
This study investigates the distributional effects of international organizations within their member countries. It addresses the issue empirically by examining the causal effect of International Monetary Fund (IMF) programs on income inequality. Introducing a new instrumental variable for IMF progr...
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| Main Author: | |
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| Format: | Article (Journal) Book/Monograph Working Paper |
| Language: | English |
| Published: |
Heidelberg
University of Heidelberg, Department of Economics
September 2016
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| Series: | Discussion paper series / University of Heidelberg, Department of Economics
No. 617 |
| In: |
Discussion paper series (no. 617)
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| DOI: | 10.11588/heidok.00021875 |
| Subjects: | |
| Online Access: | Resolving-System, kostenfrei, Volltext: http://dx.doi.org/10.11588/heidok.00021875 Resolving-System, kostenfrei, Volltext: http://nbn-resolving.de/urn:nbn:de:bsz:16-heidok-218759 Verlag, kostenfrei, Volltext: http://www.ub.uni-heidelberg.de/archiv/21875 Resolving-System, kostenfrei, Volltext: https://doi.org/10.11588/heidok.00021875 Verlag, kostenfrei, Volltext: http://archiv.ub.uni-heidelberg.de/volltextserver/21875/1/Lang%202016%20dp617.pdf Resolving-System, kostenfrei, Volltext: http://hdl.handle.net/10419/162960 
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| Author Notes: | Valentin Lang |
| Summary: | This study investigates the distributional effects of international organizations within their member countries. It addresses the issue empirically by examining the causal effect of International Monetary Fund (IMF) programs on income inequality. Introducing a new instrumental variable for IMF programs, I exploit time variation in the IMF’s liquidity and cross-sectional variation in a country’s probability of having a lending arrangement with the IMF. Using panel data for 155 countries over the 1973–2013 period, the results show that IMF programs substantially increase income inequality in democracies, while having no such effect in non-democracies. The size of this effect on democracies is smaller the more democratized the IMF’s decision-making processes are. These results are consistent with the theory that powerful, ‘democratically deficient’ international organizations that interfere in domestic politics are capable of restricting the responsiveness of democratic governments to the preferences of their citizens. |
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| Item Description: | Gesehen am 07.12.2016 |
| Physical Description: | Online Resource |
| DOI: | 10.11588/heidok.00021875 |