Comparative political economy of the IMF arrangements after the Arab uprisings: Egypt and Tunisia

Abstract

In the post-uprising period, while Tunisia was relatively successful in its negotiations with the International Monetary Fund (IMF), which provided it with a stand-by agreement in the amount of $1.74 billion, Egypt remained far from reaching any agreement. In an attempt to explain the difference between the IMF experiments in the two countries, that is, the factors leading to the signing of an agreement with the IMF or the inability to do so, this article proposes two arguments, based upon one positive and one negative factor: (1) distinctive domestic political dynamics and (2) the availability of alternative resources. In the two cases, the article argues that the IMF experiment was more successful in Tunisia because Tunisia enjoyed a more suitable domestic political environment which promoted and enabled reforms and thus enabled the negotiations with the IMF. Tunisia also lacked alternative resources that could be used as substitutes for the IMF loan. On the other hand, the IMF...