eprintid: 21875
rev_number: 14
eprint_status: archive
userid: 2744
dir: disk0/00/02/18/75
datestamp: 2016-09-27 10:43:10
lastmod: 2016-10-07 14:48:42
status_changed: 2016-09-27 10:43:10
type: workingPaper
metadata_visibility: show
creators_name: Lang, Valentin
title: The Economics of the Democratic Deficit: The Effect of IMF Programs on Inequality
subjects: ddc-330
divisions: i-181000
keywords: International Organizations, International Monetary Fund (IMF), Income Inequality, Democracy
abstract: This study investigates the distributional effects of international organizations within their member countries. It addresses the issue empirically by examining the causal effect of International Monetary Fund (IMF) programs on income inequality. Introducing a new instrumental variable for IMF programs, I exploit time variation in the IMF’s liquidity and cross-sectional variation in a country’s probability of having a lending arrangement with the IMF. Using panel data for 155 countries over the 1973–2013 period, the results show that IMF programs substantially increase income inequality in democracies, while having no such effect in non-democracies. The size of this effect on democracies is smaller the more democratized the IMF’s decision-making processes are. These results are consistent with the theory that powerful, ‘democratically deficient’ international organizations that interfere in domestic politics are capable of restricting the responsiveness of democratic governments to the preferences of their citizens.
date: 2016-09
id_scheme: DOI
id_number: 10.11588/heidok.00021875
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0617
ppn_swb: 869796437
own_urn: urn:nbn:de:bsz:16-heidok-218759
language: eng
bibsort: LANGVALENTTHEECONOMI201609
full_text_status: public
series: Discussion Paper Series, University of Heidelberg, Department of Economics
volume: 0617
place_of_pub: Heidelberg
pages: 43
citation:   Lang, Valentin  (2016) The Economics of the Democratic Deficit: The Effect of IMF Programs on Inequality.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/21875/1/Lang%202016%20dp617.pdf