Submission 122
Scapegoating The IMF
P1-G07-03
Presented by: Bernhard Reinsberg
Governments undergoing lending programs by the International Monetary Fund (IMF) often scapegoat the Fund for unpopular reforms, yet we know little about their political consequences. Do governments scapegoating the IMF undermine citizens’ support for the Fund, one of the international financial institutions established in Bretton Woods, New Hampshire, at the end of World War II? How do the burdens of these programs influence citizens’ support of the reform programs and their willingness to vote for their incumbent government? Does blame-shifting protect incumbent politicians from the electoral punishment of their voters?
We utilize a novel survey experiment in Pakistan to examine the efficacy of scapegoating the IMF on public support for the Fund, their own IMF program, and their evaluation and willingness to support the incumbent government. Our original survey experiment examines the political efficacy of blame-shifting in the context of an economic adjustment program. Survey experiments maximize internal validity, given that treatments are randomly assigned. We chose the case of Pakistan—a representative case of a developing country in economic difficulty and a repeat IMF borrower. Our survey experiment is an appropriate test of the scapegoating argument in a typical developing country, which, as with most LDCs, has a history of IMF programs. Our survey experiment also maps closely to the language used by politicians and civil society actors in the debate around the IMF program.
To complement our original survey experiment, we use cross-country longitudinal surveys, available from the World Values Survey project. These surveys allow us to probe the external validity of our results beyond the Pakistani case. The main drawback of observational surveys is that we lack experimental control over the respondents’ exposure to specific informational treatments, which requires adjustments to our research design. We wrap this quantitative work with illustrative qualitative work from Pakistan and other examples from around the world, including Kenya and Argentina, to illuminate our arguments.
The results from our research indicate the relative ineffectiveness of government scapegoating of the IMF. This leads us to question the central tenets of the long-standing political economy of IMF lending literature about the political advantage of scapegoating the IMF. The results indicate that governments do not persuade their citizens to attribute blame to the Fund. Citizens blame their governments for the austerity of the economic reform programs. Citizens are also less likely to express support and vote for the incumbent despite government attempts to scapegoat the Fund. Governments do not improve their standing with their citizens when they are able to maintain social welfare protections. Finally, the evidence suggests that while citizens are unhappy about the economic austerity associated with these economic reform programs, they hold a reservoir of confidence in the Fund that does not worsen, despite the economic pain associated with these adjustment programs.
We utilize a novel survey experiment in Pakistan to examine the efficacy of scapegoating the IMF on public support for the Fund, their own IMF program, and their evaluation and willingness to support the incumbent government. Our original survey experiment examines the political efficacy of blame-shifting in the context of an economic adjustment program. Survey experiments maximize internal validity, given that treatments are randomly assigned. We chose the case of Pakistan—a representative case of a developing country in economic difficulty and a repeat IMF borrower. Our survey experiment is an appropriate test of the scapegoating argument in a typical developing country, which, as with most LDCs, has a history of IMF programs. Our survey experiment also maps closely to the language used by politicians and civil society actors in the debate around the IMF program.
To complement our original survey experiment, we use cross-country longitudinal surveys, available from the World Values Survey project. These surveys allow us to probe the external validity of our results beyond the Pakistani case. The main drawback of observational surveys is that we lack experimental control over the respondents’ exposure to specific informational treatments, which requires adjustments to our research design. We wrap this quantitative work with illustrative qualitative work from Pakistan and other examples from around the world, including Kenya and Argentina, to illuminate our arguments.
The results from our research indicate the relative ineffectiveness of government scapegoating of the IMF. This leads us to question the central tenets of the long-standing political economy of IMF lending literature about the political advantage of scapegoating the IMF. The results indicate that governments do not persuade their citizens to attribute blame to the Fund. Citizens blame their governments for the austerity of the economic reform programs. Citizens are also less likely to express support and vote for the incumbent despite government attempts to scapegoat the Fund. Governments do not improve their standing with their citizens when they are able to maintain social welfare protections. Finally, the evidence suggests that while citizens are unhappy about the economic austerity associated with these economic reform programs, they hold a reservoir of confidence in the Fund that does not worsen, despite the economic pain associated with these adjustment programs.