Accounting for Failure Through Morality: The IMF’s Involvement in (Mis)managing the Greek Crisis

Stephanos Avakian () and Marianna Fotaki ()
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Stephanos Avakian: University of Brighton, School of Business and Law
Marianna Fotaki: University of Warwick, Warwick Business School

Journal of Business Ethics, 2024, vol. 189, issue 4, No 10, 817-841

Abstract: Abstract In examining how reform-leading supranational institutions respond to public criticism, this article advances current theory on their institutional accountability mechanisms and extends research on this topic by focusing on their responses to public criticism of alleged reform failures. We consider the case of the International Monetary Fund’s (IMF’s) involvement in the Greek economic crisis, as the structural adjustment reforms it imposed to stabilize the economy. We show how these controversial and, by many accounts, failed policies have profoundly impacted the well-being of the recipient country by reducing social cohesion and impoverishing the most vulnerable groups. In explaining the IMF’s institutional response mechanism for fending off such criticism, we offer moral regulatory appropriation (MRA) as a processual framework and present the IMF’s organizing logic of institutional legitimation processes in four domains of action: agentic mission, reform policies, institutional policy negotiations, and moral appropriation. We argue that this enables institutions to maintain moral legitimacy despite evidence of their reforms’ policy failure and various negative consequences for their populations. The proposed framework has theoretical implications for conceptualizing the rhetorical deployment of moral legitimation to secure and defend institutional accountability. We also highlight the limitations and boundaries of such an approach by the IMF and similar reform-leading institutions.

Keywords: International Monetary Fund; Moral appropriation; Legitimacy; Institutional accountability (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10551-022-05312-w

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