Academic seminar "Capital Flight and The Political Economy of IMF Conditionality " by Andreas Kern

11/12/2020 at 5:00 PM ISST



The next seminar within KSE Academic seminars series will be held on November 12, at 17:00 (Kyiv time). 

Andreas Kern, a professor of Georgetown University, will present his research "Capital Flight and The Political Economy of IMF Conditionality".

About the speaker. Dr. Andreas Kern is an Associate Teaching Professor at the McCourt School of Public Policy at Georgetown University. His research concentrates on the political economy of macroeconomic and financial governance with a special focus on central banks, credit market dynamics, and financial crises. Analyzing complex interactions between political and economic dynamics in international financial markets, his research underscores the importance of an interdisciplinary and evidence-based approach towards mitigating political and economic risks in the course of achieving sustainable poverty alleviation. His research has been featured in internationally leading scientific journals.

Dr. Kern earned his Ph.D. in Political Economy from Freie Universität Berlin and holds an M.Sc. in Economics from Ludwig Maximilians Universität in Munich.

Abstract. As international lender of last resort, the International Monetary Fund (IMF) injects fresh capital into countries in economic troubles and in exchange requires borrowing governments to accept a myriad of policy conditions. Complementing a substantial literature on IMF programs, we hypothesize that a country's hidden treasures in foreign bank accounts -- in part arising from ex-ante illicit financial flows and capital flight -- have a first-order impact on a government's willingness to call upon the IMF and to accept more loan conditions. Relying on a novel dataset comprising 162 countries between 1980 and 2018, we show that an increase in capital flight by one standard deviation increases the predicted probability of participating in an IMF program by up to 8.4%, even when this comes with greater conditionality attached. Our analysis offers empirical insights into the connection between capital flight to offshore financial destinations and submission to structural adjustment.

This seminar is enabled by the financial support from Sweden. 

Registration for this event is closed.

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