State Repression, the IMF and Financial Crisis: Empirical Evidence

This chapter reports the data, statistical models and results obtained from testing Hypothesis 2 which states that government repression (abuse) of the physical integrity rights of citizens is likely to increase in IMF-assisted countries in the immediate aftermath of the “twin” outbreak of sudden reversal and currency crisis. We begin by discussing our time-series cross-sectional (TSCS) sample to test Hypothesis 2. We then describe the operationalization of two alternative measures of the dependent variable. Each of these two measures essentially operationalize an ordinal scale of government repression. This is followed by an in-depth discussion of the operationalization of the independent variable in Hypothesis 2: the joint occurrence of financial crisis (sudden reversal and currency crisis episodes) in IMF program-participating country-years or, in other words, financial crisis that occur in countries observed under IMF programs. We then estimate a variety of statistical models that address numerous econometric challenges that emerge from testing our second testable hypothesis. These results provide robust statistical support for Hypothesis 2.