Item Details
Skip Navigation Links
   ActiveUsers:762Hits:21042202Skip Navigation Links
Show My Basket
Contact Us
IDSA Web Site
Ask Us
Today's News
HelpExpand Help
Advanced search

In Basket
  Journal Article   Journal Article
 

ID165158
Title ProperIMF As a Biased Global Insurance Mechanism
Other Title Information Asymmetrical Moral Hazard, Reserve Accumulation, and Financial Crises
LanguageENG
AuthorLipscy, Phillip Y ;  Phillip Y. Lipscy and Haillie Na-Kyung Lee ;  Lee, Haillie Na-Kyung
Summary / Abstract (Note)A large literature has established that the International Monetary Fund (IMF) is heavily politicized. We argue that this politicization has important consequences for international reserve accumulation and financial crises. The IMF generates moral hazard asymmetrically, reducing the expected costs of risky lending and policies for states that are politically influential vis-à-vis the institution. Using a panel data set covering 1980 to 2010, we show that proxies for political influence over the IMF are associated with outcomes indicative of moral hazard: lower international reserves and more frequent financial crises. We support our causal claims by applying the synthetic control method to Taiwan, which was expelled from the IMF in 1980. Consistent with our predictions, Taiwan's expulsion led to a sharp increase in precautionary international reserves and exceptionally conservative financial policies.
`In' analytical NoteInternational Organization Vol. 73, No.1; Winter 2019: p.35-64
Journal SourceInternational Organization Vol: 73 No 1
Key WordsIMF ;  Financial Crises ;  Global Insurance Mechanism


 
 
Media / Other Links  Full Text