IMF Lending and Poverty in Developing Countries

Makedonas, Eleftherios; Bellos, Sotirios K.; Subasat, Turan

doi:10.1515/jheec-2015-0015

Cited by 1 publication

(2 citation statements)

References 70 publications

(59 reference statements)

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“…Due to data limitation and their availability, some studies have used alternatives measures of poverty such as infant mortality rates and the human development index. However, the current evidence shows no clear-cut conclusion about the relationship between IMF programs and poverty proxies (Hajro and Joyce, 2009;Makedonas et al, 2015;Shandra et al, 2004Shandra et al, , 2012. A detailed summary of the studies evaluating the effects of IMF programs on income inequality and poverty is provided in Table 1.…”

Section: Effects Of Imf Programsmentioning

confidence: 88%

“…Investigating the effects of IMF programs on income distribution, most studies find that program participation is associated with higher inequality (Forster et al , 2019; Garuda, 2000; Lang, 2021; Oberdabernig, 2013; Stubbs et al , 2021). Recent studies have investigated the impact of IMF programs on poverty (Easterly, 2003; Garuda, 2000; Makedonas et al , 2015; Bird et al , 2021). This literature provides conflicting evidence depending on the sample and methodology used.…”

Section: Theoretical Considerationsmentioning

confidence: 99%

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The effects of IMF programs on income inequality: a semi-parametric treatment effects approach

Chletsos

Σίντος

2022

IJDI

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Purpose This paper aims to provide new insights regarding the impact of International Monetary Fund (IMF) programs on income inequality. Design/methodology/approach The paper uses a novel methodological approach proposed by Acemoglu et al. (2019), using (1) the regression adjustment, (2) the inverse probability weighting and (3) the doubly robust estimator, which combines (1) and (2), and a sample of annual data for 135 developing countries over the time period 1970 to 2015. Findings The findings show that IMF programs are associated with greater income inequality for up to five years. By differentiating the effect of IMF programs, the authors find that only IMF non-concessional programs have a significant detrimental effect on income inequality, while IMF concessional programs do not have a consistent effect on income inequality. In addition, the authors find that only IMF programs with a higher number of conditions have a detrimental and statistically significant effect on income inequality, compared to IMF programs with a smaller number of conditions, where their effect on income inequality is found to be insignificant. Originality/value To the best of the authors’ knowledge, the analysis developed in this paper contributes to the existing literature by applying the most methodologically sound identification strategy, which does not rely on the linearity assumption, the selection of instruments or matching variables and additionally takes into account the selection bias related to IMF program participation.

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Section: Effects Of Imf Programsmentioning

confidence: 88%