IMF Lending Programs and Repression in Autocracies

Abstract

Do International Monetary Fund (IMF) lending programs increase repression in borrowing countries? We argue that repression worsens when autocratic governments enter conditional lending arrangements with the IMF. Autocracies are likelier than democracies to harshly crackdown during episodes of heightened protest and unrest triggered by IMF-mandated adjustment and structural reform programs. But harsh repression of anticipated spikes in dissent spurred by liberalization-oriented IMF conditions may also be used by autocrats to proactively signal their commitment to preserve regime insiders’ advantages. We present several tests of the arguments in the article. In the first test, we use a compound instrumental variable to estimate the conditional difference in human rights scores between IMF program participation and non-participation in both democratic and autocratic country-years (1975–2014). We do not find evidence for clear links between IMF program participation and human rights in developing democracies. In autocracies, however, the relationship between IMF lending programs and human rights respect is consistently negative and significant. In further tests, we isolate the impact of different types of IMF conditionality. Evidence suggests that IMF programs with more numerous structural reforms (namely, pro-privatization conditions) are associated with lower human rights protections in autocratic countries.