The political economy of IMF conditionality and central bank independence

International organizations (IOs) often drive policy change in member countries. Given IOs' limited political leverage over a country, previous research argues that IOs rely on combination of hard pressures (i.e., conditionality) and soft socialization) to attain their goals. Expanding this literature, we hypothesize can enhance through loan conditions aimed at enhancing the independence key administrative units. Studying mechanism context Monetary Fund (IMF), argue prescribing structural central banks (CBI conditionality), IMF empowers gain more with aim limit government's ability (ab)use monetary for gain. Divorcing authorities from respective government, intends alter dynamics towards achieving greater program compliance long-term macro-financial stability. Relying dataset including up 124 countries between 1980 2012, find deploys CBI conditionality fewer checks balances, less independent bank, where government relies heavily monetization public debt.