IMF loans lead to economic harmony in autocracies, but not in democracies
Published: 4 February 2026
Commentary
Research shows that when the International Monetary Fund gives countries financial help it encourages freer market policies, but people in democracies often resist these changes (as seen in Greece), while people in autocracies tend to want more economic liberalisation, such as in Zimbabwe.
Financial assistance from the International Monetary Fund causes member countries to adopt more liberal economic policies, but how this liberalisation is received by citizens differs greatly between autocracies and democracies, research finds.
New analysis shows that IMF lending is linked to the adoption of more liberal economic policies, such as free market competition. However, these liberalising policies provoke public resistance when implemented in already relatively liberalised democracies, while citizens in autocracies seem to crave greater liberalisation in response to IMF-backed reforms.
The study highlights the fluctuating gap between the economic policies citizens wish for and the economic policies that they get when receiving IMF assistance. Researchers from the University of Glasgow, University College London, and Binghamton University used data from 75 countries (between 1990 and 2016) to measure the gap between public preferences (as per the World Values Survey) and economic policy (measured by the Fraser Institute’s Economic Freedom Index).
The IMF is an organisation of 191 member countries that provides policy advice, capacity development and financial assistance to its members with the aim of achieving sustainable growth and prosperity.
In democracies, IMF lending widens the gap. The data shows citizens of democracies prefer more protection from market forces than promoted by the IMF. This explains citizens' protests in Greece and Kenya in response to these reform packages.
In autocracies, IMF lending narrows the gap. Citizens of autocracies demonstrate a desire for greater economic liberalism than their governments provide. The large gap that remains in autocratic states such as Zimbabwe and Venezuela indicates that citizens want greater economic liberalism than their governments provide.
Prof Bernhard Reinsberg, a co-author of the study, said: “The results show citizens of democracies prefer more protection from market forces than promoted by the IMF. This suggests that policies promoted by the IMF undermine economic democracy in democratic societies, by imposing policies that don’t have public support. In contrast, in autocracies IMF policies shift economic policy closer to citizens' preferences.
“This divergence between regime types is down to two main factors. First, autocracies start with lower levels of economic liberalism, leaving greater room for liberalisation without surpassing citizen preferences. Second, autocracies are less responsive to popular opposition when they do exceed those preferences.”
“We believe the IMF can play a Good Samaritan role by helping governments implement economic policies their citizens already support, particularly in autocracies, a role which has been historically overlooked.”
Read the full paper on the Oxford Academic webpage.
First published: 4 February 2026