Why does the IMF assign labor conditions? The Burden of Adjustment, Exchange Rate Regimes, and Labor Conditions
Saliha Metinsoy
Working Paper No. 18  September 2019

Why does the International Monetary Fund (IMF) assign more stringent labor conditions in some cases and not others? This paper argues that the Fund’s bureaucratic organizational culture and neoliberal economic beliefs dictate its interpretation of international economics and predict the stringency of labor conditions in its programs. Particularly, the Fund staff envisage that lower unit labor costs would indirectly increase competitiveness, boost exports, and contribute to the balance of payments in fixed exchange rate regimes, where currency depreciation is not possible.

Read more...