Conclusion

Abstract

This book has shown how the International Monetary Fund utilizes its intellectual and material resources to shape institutional change in national economies during conditions of extreme economic uncertainty. The IMF’s financial resources and loan policy conditionality provide an arsenal of material incentives that can create openings for normative persuasion through iterated games over policy efficacy with national policymakers — long-term political contests where the IMF does not always prevail. Especially in cases where the IMF must persuade policymakers to adopt its ideas in an environment of acute uncertainty, the informal context in which formal institutional change takes place can thwart the organization’s efforts to sustain an IMF-friendly policy orientation over time. In such circumstances, institutional change is not a matter of the IMF simply diffusing formal policy changes that are internalized at the national level and automatically direct actors’ behaviour. Rather, at every step of the reform process, the IMF must persuade actors to adopt — and to sustain — its long-term policy preferences, which is an ongoing struggle because of the range of political variables and unexpected events that intervene. The IMF’s persuasive influence thus depends upon how policymakers interpret the political and economic circumstances they face, and whether this leads them to see the IMF as a useful means to achieve other political and economic objectives.