Do Citizens Get the Economic Policies They Want? The Role of the IMF

The International Monetary Fund provides financial assistance to member countries experiencing economic difficulty but requires that loan recipients reform their economic policies. We examine a puzzle in the literature on the effects of IMF lending on democracy. Research shows that IMF lending improves procedural democracy, but reduces policy responsiveness--the ability of citizens to get the economic policies they want. We conduct the first econometric analysis of the impact of IMF lending on policy responsiveness. Our research compares national economic policy preferences with the economic policies governments enact. We find that longer IMF program exposure has no effect on the economic policy responsiveness of democratic governments but leads autocratic leaders to enact economic policies with a much smaller role for the state than their citizens want.