Room for discretion?

• Verfasst von: Lang, Valentin [VerfasserIn]
• Verfasst von: Presbitero, Andrea [VerfasserIn]
• Titel: Room for discretion?
• Titelzusatz: biased decision-making in international financial institutions
• Verf.angabe: Valentin F. Lang, Andrea F. Presbitero
• Jahr: 2018
• Jahr des Originals: 2017
• Umfang: 16 S.
• Fussnoten: Online 14 September 2017 ; Gesehen am 30.10.2019
• Titel Quelle: Enthalten in: Journal of development economics
• Ort Quelle: Amsterdam [u.a.] : Elsevier, 1974
• Jahr Quelle: 2018
• Band/Heft Quelle: 130(2018), Seite 1-16
• ISSN Quelle: 0304-3878
• DOI: doi:10.1016/j.jdeveco.2017.09.001
• Datenträger: Online-Ressource
• Sprache: eng
• Sach-SW: Debt sustainability
• Sach-SW: F34
• Sach-SW: F53
• Sach-SW: H63
• Sach-SW: H68
• Sach-SW: IMF
• Sach-SW: International organizations
• Sach-SW: Political economy
• Sach-SW: World Bank
• K10plus-PPN: 1680710591

Abstract

We exploit the degree of discretion embedded in the World Bank-IMF Debt Sustainability Framework (DSF) to understand the decision-making process of international financial institutions. The unique, internal dataset we use covers the universe of debt sustainability analyses conducted between December 2006 and January 2015 for low-income countries. These data allow us to identify cases where the risk rating implied by the application of the DSF's mechanical rules was overridden to assign a different official rating. Our results show that both political interests and bureaucratic incentives influence the decision to intervene in the mechanical decision-making process. Countries that are politically aligned with the institutions' major shareholders are more likely to receive an improved rating; especially in election years and when the mechanical assessment is not clear-cut. These results suggest that the room for discretion international financial institutions have can be a channel for informal governance and a source of biased decision-making.