Are IMF lending programs good or bad for democracy?

Stephen C Nelson*, Geoffrey P.R. Wallace

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

20 Scopus citations


Have IMF lending programs undermined political democracy in borrowing countries? Building on the extensive literature on conditional lending, we outline several pathways through which IMF program participation might affect the levels of democracy in borrowing countries - including a new variant that suggests the possibility of a positive association between lending program participation and democracy scores. In order to test the argument we assemble annual data from 120 low- and middle-income countries observed (at maximum) in each year between 1971 and 2007. We use three strategies - genetic matching, instrumental variables, and difference-in-differences estimation - to better estimate the direction and size of the statistical association between participation in IMF lending programs and the level of democracy. We find evidence for modest but definitively positive conditional differences in the democracy scores of participating and non-participating countries.

Original languageEnglish (US)
Pages (from-to)523-558
Number of pages36
JournalReview of International Organizations
Issue number4
StatePublished - Dec 1 2017


  • Conditional Lending
  • Democracy
  • International Monetary Fund
  • International organizations

ASJC Scopus subject areas

  • Economics and Econometrics
  • Political Science and International Relations


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