IMF lending programs: Participation and impact

Signalling credibility? The IMF and catalytic finance

“…I also use the log of inflation to capture the country's policy stance, regional dummies to capture heterogeneity, and United States (US) foreign aid to capture great power influence. 14 These variables reflect the conventional wisdom of what factors drive states to the Fund, and are supported by a number of studies (Conway 1994;Knight and Santaella 1997;Thacker 1999;Przeworski and Vreeland 2000). All variables are lagged by one year to avoid simultaneity.…”

“…IMF programmes are designed to address disequilibria in a state's balance of payments. Thus, it is not surprising that studies of the conditions in which these arrangements are initiated focus on a consistent number of factors: low reserves, high levels of debt, high current account deficits, and often high inflation, budget deficits and rapid growth of the money supply (McDonald 1986;Joyce 1992;Conway 1994;Knight and Santaella 1997).…”

“…Many studies of catalytic finance recognize the importance of assessing the counterfactual to adequately assess the effect of the IMF (Bird and Rowlands 2002: 234;Cottarelli and Giannini 2002: 18;Morris and Shin 2005). Other studies of the effects of IMF programmes on other dependent variables have overwhelmingly employed corrections for selection bias (Przeworski and Vreeland 2000;Bordo and Schwartz 1999;Conway 1994). However, little empirical work has employed a correction to more clearly assess the effect of the IMF programme on capital flows.…”

Does the IMF Influence Fiscal and Monetary Policy?

“…There is a considerable body of evidence that the balance of payments problems of IMF borrowers have been largely of their own making and that macroeconomic performance during inter-program years has been deteriorating as the number of past programs increased (Evrensel 2002). Participation in IMF programs thus increases the probability of future programs (Conway 1994). As has been…”

Prolonged Use and Conditionality Failure: Investigating IMF Responsibility

“…9 Besides, Conway (1994), estimating the probability of participating in an IMF programme for a sample of 74 developing countries over the period 1976-86, using a tobit model finds that the greater the percentage of IMF facility drawn down in the previous year the greater the duration of the current IMF programme.…”