Resisting assistance: how external financiers influence IMF bailout requests

Thesis

An established body of literature assumes that variation in International Monetary Fund (IMF) programme participation primarily reflects governmental preference in borrowing countries. But this consensus fails to account for cases where a formal request for Fund assistance materialises against the will of domestic authorities. Why does resistance to IMF intervention break down in some crisis-stricken countries, while others steer through financial crisis without recourse to the Fund? The explanation proposed in this dissertation focuses on the structural power of external finance. Dominant creditors and donors, simply by withdrawing or withholding their capital, have the capacity to induce cash-strapped governments to seek Fund programmes. However, the effectiveness of this form of coercion hinges on the credibility of disinvestment threats—whether the prospect of a credit cut-off is perceived as sufficiently serious and consequential. I argue that in situations where financiers are more reliant on the target country than vice versa, they cannot credibly threaten to suspend financial support. This diminishes the impact of structural power and allows some reluctant governments to successfully circumvent the IMF. I test the implications of this theory using a mixed-methods empirical strategy. This consists of quantitative analysis of IMF loan requests from 1975 to 2022 and a paired comparison of two case studies in Ghana and Nigeria. Bridging international relations and comparative politics, the paper sheds much-needed light on the mechanisms through which external financiers, as the principal controllers of capital in the global financial system, shape policy outcomes in sovereign states. Concurrently, it clarifies the precise conditions under which these mechanisms might fail, allowing some states to pursue independent domestic policies.

Authors: Gunu, K

• DOI: 10.5287/ora-e288pmrwv
• Type of award: DPhil
• Level of award: Doctoral
• Awarding institution: University of Oxford
• Language: English