Confidence in the World Bank and IMF : Alignment of Individual Beliefs and Institutional Policies

This study presents an empirical analysis of individual expressions of confidence in the World Bank (WB) and the International Monetary Fund (IMF) using the World Values Survey-Wave 7 data. The main hypothesis tested is that confidence in each institution is positively associated with alignment of survey respondents’ economic beliefs and the policies of the institution. Close alignment of individual beliefs and institution policies are hypothesized to underpin expressions of confidence, whereas misalignment between beliefs and policies are associated with expressions of less confidence. Discrete choice models (Ordered LOGIT) of respondent’s expressions of confidence are estimated controlling for both country and individual characteristics. Generalized Ordered logit (GOLOGIT) models are estimated which allow explanatory variable coefficients to vary across levels of expressed confidence thereby revealing heterogeneous effects by income and other critical economic factors. The empirical models of expressed confidence are estimated including specific explanatory variables associated with the institution’s role and mission. Closer alignment of beliefs with institutional policies is positively associated with greater confidence. However, greater national reliance on assistance from either the IMF or the World Bank is associated with significantly less confidence, suggesting conditionalities for that assistance are resented by respondents in those countries