Voters and the IMF: Experimental Evidence From European Crisis Countries

Abstract

IMF interventions are often associated with rising political discontent in countries where the Fund intervenes. Studies examining this relationship, however, face the challenge of disentangling the impact of the IMF from the impact of the crisis that triggered the intervention. To address this challenge, we conduct survey experiments in Greece, Ireland, Portugal, and Spain and directly assess how voters evaluate the costs and benefits of an IMF intervention. We find that voters believe that the crisis will more likely be solved when the IMF intervenes, but they are also critical of the corresponding loss of national sovereignty. Because the former consideration, on average, dominates their assessment, IMF interventions increase the support of voters for unpopular economic policies. Nonetheless, cross-country differences suggest that continued public support for intervention hinges on the IMF’s ability to deliver on its promise to help resolve the crisis.