IMF Surveillance and America’s Turkish Delight
IMF Surveillance and America’s Turkish Delight

Summary/Abstract: Recently, there have been US offers to payoff Turkey for its cooperation in the war against Iraq. They are as follows: First, USD 6 billion were offered in exchange for the use of Turkey’s bases during a US attack on Iraq; second, USD 1 billion dollars were offered in exchange for the use of the Turkish air space, contingent upon Turkish compliance with the continued IMF surveillance. It is argued that the United States used the IMF as an agent to impose, monitor, and assess strict financial discipline on Turkey. Borrowing arguments from the growing literature on delegation to international organisations and principal-agent models, this case raises important points and explains how the US have benefited from delegating loan monitoring to the IMF’s surveillance function.

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