POLITICAL ECONOMY INFLUENCES OF IMF PROGRAMMES 1255 © Blackwell Publishing Ltd 2003 © Blackwell Publishing Ltd 2003, 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA 1255 Political Economy Influences Within the Life-Cycle of IMF Programmes Graham Bird and Dane Rowlands 1. INTRODUCTION OR an institution that is ultimately governed by politicians through its Board of Governors and makes loans and gives policy advice to governments, the political dimensions of the International Monetary Fund’s operations have, for a long time, received relatively scant attention by comparison with that paid to the economics of IMF conditionality. Even where politics has been addressed, it has often been tacked on as an amorphous residual rather than being examined in a methodical and direct fashion. Early attempts to explain IMF lending purely in terms of economic variables suggested that there was a missing political com- ponent that affected countries’ willingness to turn to the Fund, but did not pursue the issue. For example, in an early study Bird and Orme (1981) find that their economic model over-predicts drawings and conclude that ‘drawings are not a purely economic phenomenon and other political, social and institutional factors need to be taken into account before a satisfactory explanation may be given’. But they do not specify what these are. More recently Bird (1995) again con- cluded that ‘the remaining challenge is to explain the residual variation which is left unexplained by economic characteristics’. Domestic political instability was also sometimes loosely attributed to IMF programmes without much attention being paid to the causal connections. At the time of the Third World debt crisis in the 1980s some observers began to suggest forcefully that the Fund’s lending decisions were being influ- enced by the special interests of major shareholders rather than by economic judgement alone, but again, the nature and extent of this political influence was GRAHAM BIRD is from the Surrey Centre for International Economic Studies, University of Surrey, Guildford. DANE ROWLANDS is from the Norman Paterson School of International Affairs, Carleton University, Ottawa, Canada. F