Research Note: Romania and the IMF - The Effects of IMF Support on Economic and Social Policy in a Transition Country 1 by Valentin Budau, Radu Cristescu, Leonard Ionita, Ionut Sterpan, Valentin Vasilescu, and Annette Freyberg-Inan Abstract This research project attempts to answer the question: How has cooperation with the International Monetary Fund (IMF) affected Romanian economic and social policy since 1989? The investigation proceeds by identifying the five main policy objectives identified in the current stand-by-agreement between Romania and the IMF and tracing the impact of IMF pressure in each of these areas: privatization, arrears, wage policy and financial discipline in the public sector, and the evolution of macroeconomic indicators. We have so far found that, even as IMF loan conditions cannot be claimed to have been satisfactorily fulfilled in any of these areas, with the exception of the current evolution of macroeconomic indicators, it also cannot be denied that conditions have been partially implemented in all the above-mentioned areas and have been at least minimally successful in all except the improvement of financial discipline in the public sector. The overall impact of cooperation with IMF has been to progressively (although not (yet) to the intended extent) align Romania with the so-called “Washington consensus” on economic policy, which is a crucial driving force in its current transnationalization. 1. Introduction The study of the impact of cooperation with international organizations on the domestic politics of member or prospective member states falls within the general scope of the field of study of international socialization. Viewed from within this framework, international organizations may be understood as “nannies”, which propagate the norms which are constitutive of and/or promoted by them through the use of carrots and sticks, different ways of improving and ensuring compliance of the actors, typically nation states, which are either members or aspire to become members of the organization. 2 Another slightly different angle from which to approach the problem of the impact of international organizations on policy “at home” is provided by the field of study of “transnationalization,” which takes a less actor-oriented and more of a bird’s eye perspective on the spread of policies and decisionmaking procedures across national borders. 3 Viewed from each perspective, the spread of norms across borders, even though it may be initiated and materially supported primarily by transnational actors such as international organizations, in fact involves a network of actors at various levels, 1 This is a report on on-going research. It does not represent the final findings of the project, which are expected in early 2004. THIS IS A WORK IN PROGRESS. 2 See, for example, Ronald Linden (ed.), Norms and Nannies: The Impact of International Organizations on the Central and East European States (Lanham, Md: Rowman & Littlefield, 2002). 3 See, for example, James N. Rosenau’s visionary The Study of Global Interdependence: Essays on the Transnationalization of World Affairs (London/New York: Continuum International Publishing Group, 1981) and Jean Grugel (ed.), Democracy Without Borders: Transnationalization and Conditionality in New Democracies (London: Routledge / ECPR: Studies in European Political Science 10, 1999).