More candid and yet still constrained: The International Monetary Fund’s revised approach to tackling corruption

The IMF’s 2018 Framework for Enhanced Engagement on Governance sets out a much more ambitious and interventionist role for the organisation in tackling corruption around the world. For an ostensibly apolitical organisation with a narrow mandate centred on ensuring macroeconomic stability, this marks a major departure into a highly sensitive policy area. Given the Fund’s considerable clout, exercised through loan conditionality and regular surveillance, in a context of widespread malaise about the ineffectiveness of multilateralism in general and anti-corruption efforts in particular, it is also potentially significant for global efforts to combat corruption. This paper therefore seeks to understand how and why the Fund has adopted this new approach, and to offer insights into the potential implications. Drawing on rationalist and constructivist theories about how change happens in international organisations, the research analyses IMF loan agreements, policies and evaluations, in-country governance diagnostics, and interviews with stakeholders at the Fund and connected institutions to explores the drivers of change. The research finds that the constructivist account offers most insights into this change. Fund staff undertook significant cognitive work to make the case that corruption can be macrocritical, thereby bringing corruption under the organization’s mandate and building consensus among different bureaucratic interest groups. They did this in a context of consolidating global policy norms and a changing understanding (and evidence base) of the impact of systemic corruption and particularly state capture on the macroeconomy. However, more rationalist state-centred accounts also add value to our understanding, with certain states pushing the agenda forward or constraining its scope. Moreover, early analysis of framework implementation at country level reveal that power dynamics among states remain highly relevant, since the process of negotiating loan agreements is inevitably highly contested and likely to result in uneven outcomes.