IMF Anchoring: Fostering Stabilization and Good Governance

The chapter focuses on the role of the IMF in helping the transition of planned economies to the market economy. Specifically, it investigates the potential anchoring effects that IMF assistance had in fostering democratization processes in two of the countries of the former Soviet Union (FSU), which can be considered as hybrid democracies: Georgia and Moldova. Building on the literature on the role of external factors in domestic democratization processes, the objective of this paper is that of identifying the activities carried out by an international actor such as the IMF that may serve as an anchor to democratic processes. Specifically, the Chapter suggests that the IMF help create an environment conducive to democratic developments, thereby offering an anchor to democracy, by promoting economic growth and by improving domestic institutional capacity, including via the fight against corruption and poverty.