Room for discretion? Biased decision-making in international financial institutions

• 成果类型: Article
• 署名作者: Lang, Valentin F.; Presbitero, Andrea F.
• 署名单位: Ruprecht Karls University Heidelberg; International Monetary Fund
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2017.09.001
• 发表日期: 2018
• 页码: 1-16
• 关键词: International organizations; political economy; IMF; World Bank; Debt sustainability

摘要

We exploit the degree of discretion embedded in the World Bank-IMF Debt Sustainability Framework (DSF) to understand the decision-making process of international financial institutions. The unique, internal dataset we use covers the universe of debt sustainability analyses conducted between December 2006 and January 2015 for low-income countries. These data allow us to identify cases where the risk rating implied by the application of the DSF's mechanical rules was overridden to assign a different official rating. Our results show that both political interests and bureaucratic incentives influence the decision to intervene in the mechanical decision-making process. Countries that are politically aligned with the institutions' major shareholders are more likely to receive an improved rating; especially in election years and when the mechanical assessment is not clear-cut. These results suggest that the room for discretion international financial institutions have can be a channel for informal governance and a source of biased decision-making.