The Politics of Hard Choices : Imf Programs and Government Spending

A central component of IMF programs is reducing government budget deficits. We ask how domestic political considerations shape the distribution of cuts made by governments in IMF programs. Our central finding is that IMF programs shrink the role played by domestic politics. While democracies allocate larger shares of their budgets to public services in the absence of IMF programs, the difference between democracies and non-democracies disappears under IMF programs. This result has important implications for our understanding of government spending priorities under different resource constraints