When Overlapping Organisations Play Two-Level Games: IMF–EU Interaction in Credit Lending to Latvia and Greece

Susanne Lütz and Sven Hilgers

New Political Economy, 2019, vol. 24, issue 3, 299-312

Abstract: In the literature, the cooperation of the IMF and the EU in credit lending has been discussed either from a state-centric, bureaucratic or institutionalist perspective. In this article, we examine the Troika as a set-up of multiple organisational overlap providing bureaucratic agents with constraints and opportunities for strategic action. Taking Latvia and Greece as cases in point, we analyse who prevails in a situation of conflict and why. How do these international organisations manage to overcome their differences and reach consensus? Drawing on the Two-Level game approach, we argue that negotiators are more likely to prevail over each other when their respective win-set decreases. We find that different strategies to manipulate win-sets are decisive to explain both cooperation and assertiveness. Changing costs of no agreement during a lending programme as well as the institutional procedures for programme ratification facilitate the use of these strategies.

Date: 2019
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DOI: 10.1080/13563467.2018.1443063

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