Evenhanded surveillance? Geopolitical alignment and IMF appraisal tone

Summary

Does the IMF judge its member countries evenhandedly or do political allies get friendlier assessments? We measure the tone of IMF country reports and find no evidence to suggest that countries more closely aligned with the United States or the EU are given preferential treatment. Instead, the IMF’s tone tracks economic fundamentals. When it comes to geopolitics, IMF surveillance thus appears evenhanded. Beyond geopolitics, countries scoring higher on a broad economic freedom index receive warmer IMF appraisals.

Highlights

IMF appraisal tone shows no geopolitical bias
IMF country reports do not adopt a friendlier tone for countries more closely aligned with the USA or the EU. This holds across four sentiment measures, from word lists to language models, and multiple robustness checks.

The economy speaks louder than politics
Inflation, economic growth and the current account shape what IMF staff write. As our model is able to pick up these effects, it would have the statistical power to identify any political bias as well. It does not detect any, however.

Economic freedom prompts warmer tone
Three out of four sentiment measures indicate a more favorable tone for countries that score higher on a broad economic freedom index that covers not only free-market policies but also the rule of law and price stability.