The IMF as a global monitor: surveillance, information, and financial markets

What are the effects of the International Monetary Fund's (IMF) monitoring activities? We argue that IMF surveillance exercises - known as Article IV consultations - move financial markets. Our argument is based on the design of the IMF's surveillance function, which is a relatively strong...

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Bibliographic Details
Published in:Review of international political economy : RIPE 2023-01, Vol.30 (1), p.307-331
Main Authors: Breen, Michael, Doak, Elliott
Format: Article
Language:English
Subjects:
Article IV consultations
Debates
financial markets
IMF
international institutions
International organizations
Markets
monitoring
National debt
Surveillance
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Summary:What are the effects of the International Monetary Fund's (IMF) monitoring activities? We argue that IMF surveillance exercises - known as Article IV consultations - move financial markets. Our argument is based on the design of the IMF's surveillance function, which is a relatively strong form of monitoring by the standards of most international organizations (IOs). We test this argument using an event study analysis of 428 IMF Article IV consultations. We find that the average surveillance mission has a substantial impact on sovereign debt with much greater impacts in emerging than high income economies. Interviews with market participants support and help to contextualize these findings. By illustrating the effects of surveillance, this article contributes to our understanding of whether, and to what extent, international institutions are a source of vital public information.
ISSN:0969-2290
1466-4526
DOI:10.1080/09692290.2021.2004441