The Effect of IMF Programs on Public Wages and Salaries

Effect of the IMF on public wages and salaries in democracies and non-democracies. In developing countries, governments often face strategic incentives to devote public expenditures to public wages and salaries, and such expenditures can play a vital role in fostering economic progress and reducing income inequality. The means available to the government of a developing country to do this, however, may depend on the role it plays in global governance. In this chapter, we explore how the role a developing country plays in global governance impacts upon government policies that affect the domestic distribution of income, particularly when the country faces a financial crisis. We consider the effect of International Monetary Fund (IMF) programs of economic reform on public wages and salaries. We show that their effect is contingent on the role a country plays in international institutions – particularly whether the country is a member of the United Nations Security Council (UNSC)