Master or Servant? Common Agency and the Political Economy of IMF Lending

What explains the substantial variation in the International Monetary Fund’s (IMF) lending policies over time and across cases? Some schol-ars argue that the IMF is the servant of the United States and other powerful member-states, while others contend that the Fund’s profes-sional staff acts independently in pursuit of its own bureaucratic inter-ests. I argue that neither of these perspectives, on its own, fully and accurately explains IMF lending behavior. Rather, I propose a ‘‘com-mon agency’ ’ theory of IMF policymaking, in which the Fund’s largest shareholders—the G5 countries that exercise de facto control over the Executive Board (EB)—act collectively as its political principal. Using this framework, I argue that preference heterogeneity among G5 gov-ernments is a key determinant of variation in IMF loan size and condi-tionality. Under certain conditions, preference heterogeneity leads to either conflict or ‘‘logrolling’ ’ within the EB among the Fund’s largest shareholders, while in others it creates scope for the IMF staff to exploi