The results of the statistical analysis in the previous chapter clearly indicate that changes in patterns of financial globalization have had significant and sizeable effects on IMF lending policies. This link between international capital flows and IMF policies occurs through two channels. First, private debt composition – specifically, the amount and distribution of G-5 commercial bank exposure to IMF borrowing countries – determines the intensity and heterogeneity of preferences among the Fund's major shareholders. Second, private debt composition – specifically, whether capital flows consist of bank lending rather than bond financing, and (to a lesser extent) whether the borrowers are sovereign governments or private actors – also shapes the IMF staff's expectations about the availability of catalytic financing. As the foregoing statistical analysis illustrates, these factors explain a substantial portion of the variation in IMF loan size and conditionality during the last two decades.

Nonetheless, large-sample statistical analysis provides only a partial picture of the political economy of IMF lending. In particular, while quantitative analysis enables us to identify broad cross-national trends in IMF behavior over time, it does not elucidate the causal chain linking changes in financial globalization to IMF lending outcomes, nor does it explain how and to what extent the Fund's G-5 principals and the IMF staff take each of these factors into account in specific cases.