Congressional Politics of Financing the International Monetary Fund

Abstract

We address the question of how international public goods are financed by analyzing voting in the U+S+ Congress on legislation to increase the U+S+ contri- bution to the International Monetary Fund ~IMF!+ We argue that legislators are more likely to vote in favor of an increase ~1! the more campaign contributions they obtain from banks that specialize in international lending, and ~2! the greater the share of high-skilled proglobalization workers in their districts+ The first argu- ment supports the inference that a financially strong IMF mitigates the risks of international lending, to the benefit of the lending banks+ The second reflects our claim that voters view the IMF as a positive force for global economic integration that—following Stolper-Samuelson reasoning—benefits high-skilled workers+ Lastly, we analyze IMF loan decisions and find modest support for the claim that IMF policy reflects the interests of major international banks+ Overall, our results sug- gest that private actors within the United States have individual stakes in funding the IMF+ The primary mandate of the International Monetary Fund ~IMF or Fund! is to safeguard the stability of the global financial system—an international public good+ The IMF obtains the resources it needs for its stabilization operations from mem- ber governments, with large members contributing most of the funds+ In this arti- cle, we analyze the politics of funding the IMF from the perspective of its largest contributor, the United States+ Rather than treating the United States as a single entity with a unified national interest at the Fund, we consider the preferences of political actors within the United States who exert power over financing the