ABSTRACT
The International Monetary Fund (IMF) has frequently given policy advice in situations characterized by political instability. Indeed policy failures and political problems are often associated with each other, and tackling the concrete problems of appropriate policy-setting also involves a much broader task of establishing legitimacy. There are two possible – but alas contradictory – ways in which policy advice from the outside and the establishment of political stability may be related. First, a government in an unstable and uncertain position may use an external agent as a scapegoat and try to shift the burden of responsibility for unpopular stabilization measures outside the political system. The IMF becomes in this scenario a very plausible external whipping boy. It can also be used in struggles within the government, as hardliners on stabilization try to use the external advice to capture government policy. The second alternative sees the formation of responsible policy as essential to political and economic stabilization, and advice from the outside as merely a help in reaching a new consensus on appropriate policy. This is the vision that dominates in the official description of recent IMF programs, which emphasize the need to create “ownership” of a program.
