Signals that stick: regional influence, IMF rhetoric, and FDI flows in IMF-engaged European economies

How much do the words that frame an IMF programme matter for investment—particularly in a region where EU institutions co-write the script? This paper analyses 186 Letters of Intent from 39 IMF interventions in twenty European economies (2000-2020) to track shifts between neoliberal (“Augmented Washington Consensus”), developmental, and EU-centred vocabularies and to test how those discursive signals shape foreign direct investment (FDI). A multi-mixed methods design combining both qualitative and quantitative methods underpins the inquiry. Dictionary-based text mining quantifies policy paradigms and sentiment; panel regressions link those measures to annual FDI changes; Cox survival models gauge whether rhetoric accelerates or delays sharp exits and rebounds; and fuzzy-set Qualitative Comparative Analysis maps the conjunctural bundles of discourse, macro fundamentals, and lending instruments that are sufficient for major FDI contractions or IMF entry. Three results stand out. First, neoliberal language remains numerically dominant, but heterodox and Troika references spike during crises and persist thereafter. Second, investors reward documents that pair sound fundamentals with EU-aligned or developmental rhetoric and penalise programmes heavy on orthodox austerity—especially under severe stress, when such language speeds capital flight. Third, multiple pathways—not a single recipe—link IMF engagement to FDI outcomes, underscoring the non-linear, context-dependent nature of catalytic signalling. Together, these findings show that credibility in Europe now hinges on layered narratives that blend macro responsibility with regionally coordinated, context-sensitive reform.