Developing Capacity: The IMF's Impact on State Capacity

The purpose of this thesis is to examine the impact of International Monetary Fund (IMF) loans since the adoption of the governance mandate on overall government capability. The study will explore whether the presence of IMF loans in developing countries enhances state capacity. Administrative capacity is of particular importance because it is a requisite for the integration of state and society in the national political arena and encourages joint involvement of government and citizenry in overall representation of societal interests. The model designed to test the two primary hypotheses is comprised of a simultaneous system of equations. Despite criticisms of IMF conditionality arrangements, it appears that these programs are largely effective at increasing administrative capacity, an important factor in achieving economic growth and national ownership of IMF development programs.