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Does the IMF cause civil war? A comment

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Abstract

The global economic downturn has heightened concerns about intervention by global financial institutions and political stability. One prominently-published article purports to show that signing on to an IMF structural adjustment program (SAP) increases the risk of civil war, Hartzell et al. (International Organization 64:339–56, 2010). The authors claim that IMF SAPs push liberalization, which hurts people badly enough that they foment civil war. We advance the debate by critically examining their theoretical and empirical evidence, particularly questioning their crucial assumptions about the impact of IMF programs on the economic environment in terms of who actually wins and loses from liberalization and who might be in a position to rebel. Using their data, we find that signing on to an IMF program predicts the onset of a civil war negatively if one uses a lower threshold of 25 deaths when defining civil war. These results suggest that the operationalization of the IMF variable as well as the use of large-scale civil war (1,000 deaths and above) simply capture the effect of ongoing conflict rather than the effects of liberalization. After extending the time period under study and making only minor changes to operationalization, we find that at no time does IMF involvement successfully predict the onset of a civil war.

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Notes

  1. See New York Times, The Bitter Pills in the Plan to Rescue Greece (30th April, 2010). The ‘Washington consensus’ is a term coined for specific policy package of liberalization, which pushes the opening up of markets, privatization, the removal of price supports, and the balancing of budgets etc. (Williamson 1994).

  2. Abouharb and Cingranelli (2007) present comparable results in a study using a similar design. Their study covers the years 1981–1999, using the same variable for IMF participation as HHB. Contrarily Rowlands and Joseph (2003) find a negative and significant relationship between IMF programs and civil conflict. Their study is limited to 10 years between 1985 and 1995, and the authors find that their results are not robust to alternative specifications, Bussmann et al. (2005) find no effect of IMF program participation on the risk of civil war in a sample of Sub Saharan African countries. Previous studies, thus, are limited and the results highly mixed.

  3. See Bosker and De Ree (2011) for numerous examples of civil war spillover in different parts of the globe.

  4. As a further robustness check, we replace Kegley and Hook’s (1991) measure of UNGA voting with Thacker’s (1999). He codes votes in agreement with the US as 1, votes in disagreement as 0, and abstentions as 0.5. Our results remain robust to using UNGA voting based on Thacker’s (1999) index.

  5. See Cheibub et al. (2010) for a detailed discussion on classifying democracies and dictatorships.

  6. Note that the results of signing on to the IMF also remain statistically insignificant when including the count of years a country has been under an IMF program.

  7. The results are presented in Table 2 of the online appendix available on this journal’s website.

  8. The results appear in Table 3 in the online appendix on this journal’s website. Apart from joint F-statistics, we also use the Cragg-Donald test of the null that the model is under identified, i.e., the UNGA voting index does not sufficiently identify IMF program participation (Cragg and Donald 1993). However, the Cragg-Donald test allows us to reject the null hypothesis that the model is under identified.

  9. We find no statistical significance of the UNGA voting index constructed using Kegley and Hook’s method on the onset of civil war. However, the UNGA voting index constructed using Thacker’s method did not pass the test of overidentifying restriction. These results are also displayed in an online appendix (Table 4) on the journal’s website.

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Authors’ note

We are extremely grateful to Caroline Hartzell for sharing data. We are thankful to the Editor and three anonymous referees for their valuable comments. We also thank Hannes Öhler and James Vreeland for invaluable input. Only we are to blame for any errors.

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Authors and Affiliations

  1. Department of Sociology and Political Science, Norwegian University of Science and Technology (NTNU), Trondheim, Norway

    Trude M. Midtgaard, Krishna Chaitanya Vadlamannati & Indra de Soysa

  2. Warden, St. Thomas’ College, Mt Lavinia, Sri Lanka

    Indra de Soysa

Authors
  1. Trude M. Midtgaard
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  2. Krishna Chaitanya Vadlamannati
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  3. Indra de Soysa
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Corresponding author

Correspondence to Indra de Soysa.

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Appendices

Appendix 1

Table 3 Descriptive statistics
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Appendix 2

Table 4 Data definitions and sources
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Midtgaard, T.M., Vadlamannati, K.C. & de Soysa, I. Does the IMF cause civil war? A comment. Rev Int Organ 9, 107–124 (2014). https://doi.org/10.1007/s11558-013-9167-z

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