Inequality and Ideational Change within the IMF's Research, Rhetoric and Practices

The IMF reversed its attitude regarding the subject of inequality in response to new in-house research publications that identified the issue to be a critical determinant of macro-economic stability. As a result, tackling inequality became part of the Fund’s core mandate and redistributive policies were no longer seen as inefficient, but a prerequisite to alleviating inequality and essential in ensuring sustainable economic growth. Several civil society organizations, however, argue that there is a strong discrepancy between the IMF’s rhetoric and its practices. Supposedly, the Fund has often stressed the importance of mitigating excessive levels of inequality in its public discourse, but its loan programs have not yet incorporated this progressive rhetoric as they continue to mandate regressive fiscal policies more in line with the Fund’s neoliberal past. The main aim of this study is to assess to what extent the IMF has listened to its own research findings and thereby implemented its progressive mandate through its current crisis loans. The Fund’s ideas regarding the macrocriticality of inequality, on the one hand, are assessed through a discourse analysis of its toplevel rhetoric and its key research publications, and through first-hand interviews. The Fund’s practices, on the other hand, are examined through a content analysis of the recently published loan documents and Article IV consultations. The analysis finds that the Fund’s rhetoric, Article IV consultations and staff opinions are strongly informed by the research publications as they all entail significant discussions of the macro-criticality of inequality and include the appropriate progressive policy alternatives, whereas the Fund’s crisis loans fail to include the Fund’s new progressive mandate. Therefore, the IMF’s practices have as of yet not fully incorporated the critical research findings on inequality.