The effects of the IMF on expropriation of foreign firms

Glen Biglaiser, Hoon Lee, Joseph L. Staats

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

This paper seeks to explain the determinants of foreign expropriation in the developing world. We argue that the International Monetary Fund (IMF) helps to reduce the likelihood of nationalization because of the direct leverage the Fund holds over borrowers, especially as expropriation is a blatant violation of international property rights. Using expropriation data from 1961 to 2006, and several different measures for the Fund, we find that countries under IMF agreements are less likely to nationalize foreign firms. We also show that the Fund’s influence is greatest when the IMF loan represents a larger share of the borrower country’s gross domestic product (GDP) as well as in countries with weaker political institutions. The takeaway is that IMF continues to influence policy choices in the developing world.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalReview of International Organizations
Volume11
Issue number1
DOIs
StatePublished - Mar 1 2016

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expropriation
IMF
firm
nationalization
gross domestic product
political institution
right of ownership
loan
determinants
Foreign firms
International Monetary Fund
Expropriation
Developing world

Keywords

  • BITs
  • Expropriation
  • IMF
  • Political constraints
  • WTO/GATT

Cite this

The effects of the IMF on expropriation of foreign firms. / Biglaiser, Glen; Lee, Hoon; Staats, Joseph L.

In: Review of International Organizations, Vol. 11, No. 1, 01.03.2016, p. 1-23.

Research output: Contribution to journalArticle

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