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The IMF failure that wasn't: tournaments of conditionality and strategic ignorance during the european debt crisis

Publication Geneva: Paul Bairoch Institute of Economic History, 2016
Collection Working Papers of the Paul Bairoch Institute of Economic History; 5/2016
Description 33
Abstract This article builds on ignorance studies to examine what went wrong in IMF expertise during the European debt crisis. A fundamental component of ignorance is concealing what you know. Ignorance is a strategic resource in ‘tournaments of conditionality,' when the setting of IMF conditionality is a conflicted exchange. This article covers IMF lending programs in Europe in 2008-2013 with a special focus on the first program for Greece. Empirical data is drawn from public sources made available at the start of each programs. I find that IMF ignorance resulted from a joint process of ‘private alteration' and ‘public obfuscation': the alteration of normal scenarios of debt sustainability in private expert negotiations worked in tandem with the obfuscation of doubts and risks in public stage. The key contribution of this article is to show that the ‘failure' of the IMF program for Greece can be reconceptualised as ‘success.' The immediate goal of the Greek program was to avoid the breakup of European monetary institutions. Another goal was the bailout of Greece's creditors. In this respect, the Greek program was a great success. But success came at a huge cost for EU authorities. The program was also a disaster for Greece's economy. This article claims that scholarly and popular interpretations of IMF program failures as epistemic hubris and complacency missed important problems and failed to identify the real culprits.
Keywords IMFPolicy failureAusterityEurozone debt crisisGreeceTournaments of conditionality
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PENET, Pierre. The IMF failure that wasn't: tournaments of conditionality and strategic ignorance during the european debt crisis. 2016 https://archive-ouverte.unige.ch/unige:88327

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Deposited on : 2016-10-19

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