International Organization

Research Article

International Negotiations and Domestic Politics: The Case of IMF Labor Market Conditionality

Teri L. Carawaya1, Stephanie J. Rickarda2 and Mark S. Annera3

a1 University of Minnesota, Twin Cities. E-mail: caraway@umn.edu

a2 Government Department, London School of Economics. E-mail: s.rickard@lse.ac.uk

a3 Pennsylvania State University, University Park. E-mail: msa10@psu.edu

Abstract

What is the role of international organizations (IOs) in the formulation of domestic policy, and how much influence do citizens have in countries' negotiations with IOs? We examine these questions through a study of labor-related conditionality in International Monetary Fund (IMF) loans. Using new data from IMF loan documents for programs from 1980 to 2000, we test to see if citizens' economic interests influence IMF conditionality. We examine the substance of loan conditions and identify those that require liberalization in the country's domestic labor market or that have direct effects on employment, wages, and social benefits. We find evidence that democratic countries with stronger domestic labor receive less intrusive labor-related conditions in their IMF loan programs. We argue that governments concerned about workers' opposition to labor-related loan conditions negotiate with the IMF to minimize labor conditionality. We find that the IMF is responsive to domestic politics and citizens' interests.

Teri L. Caraway is Associate Professor of Political Science at the University of Minnesota, Twin Cities. She can be reached at caraway@umn.edu.

Stephanie J. Rickard is Lecturer in the Government Department at the London School of Economics. She can be reached at s.rickard@lse.ac.uk.

Mark S. Anner is Assistant Professor of Labor Studies and Political Science at Pennsylvania State University, University Park. He can be reached at msa10@psu.edu.

Authors are listed in order of relative contribution.

We thank research assistants Jacob Westlund, Dong Fang, Susan Kang, and Mark Gough, and the Pennsylvania State University's College of the Liberal Arts and the University of Minnesota's MacMillan Travel Fund for research support. For invaluable suggestions and encouragement, we also thank Todd Allee, Lawrence Broz, Mark Copelovitch, Axel Dreher, Steph Haggard, Daniel Y. Kono, David Lake, Sara McLaughlin Mitchell, Chad Rector, David Singer, Randy Stone, and Jim Vreeland.

Supplementary material for this article can be found at www.journals.cambridge.org/ino2012001.