Deciphering the International Monetary Fund’s (IMFs) position on austerity: Incapacity, incoherence and instrumentality

Abstract

Back in 2009, at the height of the global financial crisis, the London G20 forum met and declared the Washington consensus dead. What emerged in its place was a contradictory and confusing array of narratives and international policy prescriptions for post-crisis recovery that owed as much to the past as the present. Divisions within and among International Governmental Organisations (IGOs) arose about how best to address the economic challenges, but the dominant solution was ‘austerity’ which became firmly rooted in the policies and discourse of national governments and international organisations alike. While signalling a downward political reconditioning of public welfare expectations, the austerity strategy has itself lacked organisational conviction and coherence. Austerity is, thus, important for identifying the location of social policy in international post-crisis economic discourse. Since the crisis has paradoxically, bolstered economic interests at the expense of political choice, it is also necessary to study the crisis responses advocated by economic organisations as more, rather than less significant in shaping welfare futures. This article draws on evidence from a textual content analysis of International Monetary Fund (IMF) documents over the period 2004–2015 to examine discourse on austerity and social policy. The findings indicate that, while the language of ‘austerity’ and policy prescriptions vary, the IMF’s essential position has been to advocate austerity-like policies throughout the period, leaving its ideational ‘economistic’ position on the purpose of social policy fundamentally unchanged. These findings contrast with others that perceive a shift towards social justice concerns within the organisation, whereas our evidence suggests that the IMF’s position on social policy is one of ambivalence and incoherence.