The literature examining the institutional aspects of the IMF can be grouped under two categories: state-centric and public choice approaches. The state-centric approach focuses on the influence of the powerful states in explaining the variation in the conditionalities of IMF loans, whereas the latter put a greater emphasis on the intellectual dominance of the IMF staff. However, neither of these approaches fully explains the variation as they neglect the impact of the relation between the Executive Board, the IMF staff and the recipient country, on the decision-making of the institution. This paper presents a research project attempting to analyze the variations in IMF conditionalities through building a new conceptual framework. By focusing on the case study and theory dimensions that elucidate the puzzle of the research, the paper introduces a “Two-Level Principal-Agent Model” of IMF lending with hypotheses that are being tested using a single-country study, namely the Turkish case.
