The political economy of implementing IMF reforms: evidence from Egypt and Tunisia

Abstract

In recent years, research on International Monetary Fund (IMF) programmes has focused on the question of whether the IMF has moved away from neoliberal austerity and on the socioeconomic consequences of such a potentially adjusted IMF agenda in recipient countries. This article puts forward a well-established, yet currently under-researched third issue: compliance with IMF conditions. We analyse the implementation of IMF programmes in two recent cases, Egypt and Tunisia between 2016 and 2020. In contrast to the IMF, which portrayed the Egyptian authoritarian regime as top reformer, while criticizing Tunisia’s democratically elected government, a systematic analysis of the IMF’s own reports as well as further sources reveals remarkably similar patterns of partial reform implementation in both countries. These similarities, we argue, can be explained best by joint features of the domestic political economies such as the power of domestic veto players (army, business, labour).