Abstract

"Opening the black box of financial negotiations: modeling and making sense of the IMF’s treatment towards Brazil and Argentina, 1956-64"

Fernanda de Oliveira, Geneva Graduate Institute (fernanda.oliveira@graduateinstitute.ch)

The International Monetary Fund (IMF) is central to global economic governance as the world’s leading crisis lender. IMF lending is directed toward countries facing external shocks or unsustainable external debt usually conditional on the implementation of stabilization policies. Conditional lending is one of the Fund’s most controversial practices and the primary lever through which the institution interacts with and influences member countries’ political-economic environments. Scholars have conducted broad structural studies and single-case studies to understand IMF lending patterns. Despite their important contributions, these approaches limit our understanding of how the IMF works and interacts with member countries. While the former overlooks the dynamics of these interactions; the latter restrict themselves in scope. Consequently, we still know little about what happens inside the black box of policymaking and financial negotiations of the IMF.
This paper combines tools in Digital Humanities with traditional historical methods to broaden the scope while maintaining a granular account of IMF policies. It examines over 1,000 recently declassified documents from the IMF staff and Executive Board to understand the Fund’s initial operations through two crucial cases: Argentina and Brazil in the early postwar era. The goal is to understand why these two countries that, in the Fund’s eyes, shared similar economic difficulties reacted differently during engagements with the IMF. Argentine authorities sought to comply and cooperate with the Fund, but their Brazilian counterparts hesitated. My paper opens up the black box of policymaking and financial negotiations to examine the subjective opinions, reasons, and attitudes of IMF officials that influenced these negotiations beyond the factors that the literature has identified as determinants. Crucially, the Fund dealt with both countries in a process of learning where these parallel and simultaneous interactions influenced their views and attitudes in each case, and cannot be read as independent from one another.