Shared Neoliberal Ideals: How Borrowers Become Favored by the IMF

Abstract

Why does the International Monetary Fund (IMF) treat some borrowers differently than others? This question is certainly not new. In fact, in The Currency of Confidence, Stephen C. Nelson notes that existing scholarship provides well-known answers; powerful states’ preferences, the domestic institutional constraints of the borrower, and the bureaucratic motives of IMF staff all affect conditional loans (Barnett and Finnemore 2004; Copelovitch 2010). Nonetheless, Nelson makes the case that existing explanations miss a fundamental reason why IMF loan conditionality is not uniform across cases: the convergence of neoliberal economic ideas between top IMF officials and those in the receiving country determine the loan size, severity of strings attached, and strictness of enforcement. When the borrowing country's economic policy-makers share a common set of neoliberal ideals with IMF economists, the borrower quickly becomes the IMF teacher's pet. The most laudable aspect of The Currency of Confidence is the prodigious data with which Nelson tests the strength of his ideational argument. International relations (IR) scholars who are doubtful of constructivist explanations often suggest they are too “soft and fuzzy” to prove. Nelson goes to great lengths, however, to convince the hesitant reader. He carefully explains an expertly collected original dataset of IMF loan sizes, conditions, and enforcement (1980–2000), which he subsequently analyzes. He also codes the same twenty years of educational backgrounds from the resumes of over two thousand top policymakers in more than ninety developing countries. These data support his argument and provide both a significant public good and model for future work; yet Nelson does not stop there. He also incorporates interviews and archival studies into the process tracing of historical cases, including an analysis of Argentina's turbulent times from 1976–2002.