Is It the Journey That Matters? A Fresh Look at the Impact of World Bank Policy Lending

Moll, Peter; Smets, Lodewijk

doi:10.1002/jid.3501

Cited by 4 publications

(3 citation statements)

References 43 publications

(43 reference statements)

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“…Analyzing the period , Smets and Knack (2016 present econometric evidence that the quality of economic management increases with the cumulative number of World Bank economic policy DPLs. Moll and Smets (2018) repeat this exercise for the period 1998-2015 and come to similar conclusions. Kilby (2005) shows that multilateral aid was effective in supporting factor and output market deregulation during the period 1970-2000.…”

Section: Introductionsupporting

confidence: 57%

“…Recent empirical evidence indeed seems to suggest that the process of policy engagement is more important than the number of conditions or financial arrangements that come with it. For instance, Moll and Smets (2018) econometrically examine the impact of World Bank conditionality on the Smets quality of economic policy and find that the exact number of policy actions makes no difference to the quality of economic policy, while the fact that there was at least one policy action does make a significant difference. The authors interpret this finding to mean that the process of generating economic reform results in improved quality of government policy.…”

Section: Notesmentioning

confidence: 99%

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Supporting Policy Reform from the Outside

Smets

2019

The World Bank Research Observer

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Sound economic and social policies are important if countries wish to prosper and achieve sustainable development. It is far from guaranteed, however, that policymakers select and implement good policies, which provides a rationale for external policy support. Indeed, many organizations are engaged in supporting policy reform processes in recipient countries. This study investigates the limits and opportunities of supporting policy reform by focusing on four dimensions of support: conditional financing, policy dialogue, technical evidence and political institutions. Four findings follow from a review of the literature. First, without commitment on the recipient side, conditional financing is unlikely to induce policy reform. Second, when external actors acquire a seat at the policy dialogue table, it is important to detect (and influence) the beliefs policymakers hold. Third, outside parties should bring sound evidence to the table about the costs, benefits, and effectiveness of their policy proposals. Finally, supporting changes in political institutions without considering general equilibrium effects can be counterproductive. The study concludes with a discussion and some avenues for future research in this field.

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Section: Introductionsupporting

confidence: 57%

Section: Notesmentioning

confidence: 99%

Supporting Policy Reform from the Outside

Smets

2019

The World Bank Research Observer

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“…Finally, we are conscious of not overfitting our regression models (Moll & Smets, 2020). To address this problem, we adopt two approaches.…”

Section: Robustness Checksmentioning

confidence: 99%

Does cultural diversity hinder the implementation of IMF-supported programs? An empirical investigation

Vadlamannati

Brazys

2022

Rev Int Organ

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Do ethno-linguistic divisions in a country hamper the implementation of IMF-supported programs? We construct a new measure of implementation and compliance with IMF programs approved during the 1992–2014 period covering 104 countries. Using several measures of diversity, we find that higher levels of ethno-linguistic and cultural fractionalization affect the probability of successful implementation of IMF conditions. Our results show that diverse preferences and coordination failures due to ethnic and cultural diversity undermine the successful implementation of IMF programs. Furthermore, we find that ethno-linguistic fractionalization weakens the implementation of ‘hard’ IMF conditions relative to ‘soft’ conditions. Our findings also show that ethno-linguistic divisions do not affect the implementation of IMF conditions in autocracies as opposed to democracies. These findings are robust to addressing endogeneity concerns using an instrumental variable approach and to a number of alternative specifications, data sets, and approaches.

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International monetary fund conditionality and structural reforms: Evidence from developing countries

Apeti,

Gomado

2024

Econ of Transit and Inst Chang

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The global economy, dominated by the consequences of a disastrous health crisis and international tensions, needs policy support to regain its growth dynamic. To regain an inclusive and sustainable growth dynamic, structural policies of governments are needed to allow a reallocation of resources and to stimulate productivity. International cooperation seems to be necessary and the IMF's contribution could play an important role in promoting reforms. Indeed, in IMF‐supported programmes, the conditions for developing countries' transition to liberalization and open markets are often common. We address the question of whether periods of International Monetary Fund (IMF) conditionality contribute to the promotion of structural reforms in developing countries. Through the entropy balancing method and alternative identification strategies, we show that IMF conditionality programmes promote structural reforms in developing countries. We show that the effect of IMF conditionality can vary depending on the type of conditionality, the type of reform, the time frame and the initial level of structural reforms and can depend on some structural factors including the business cycle, the quality of fiscal and monetary policy, the level of development and the quality of institutions. Furthermore, we show that IMF conditionality can have spillover effects on trading partners and that IMF conditionality programmes that are met tend to have a greater impact on structural reforms. Finally, the effects of adopting reforms under IMF conditionality depend on domestic partisan politics.

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Is It the Journey That Matters? A Fresh Look at the Impact of World Bank Policy Lending

Cited by 4 publications

References 43 publications

Supporting Policy Reform from the Outside

Supporting Policy Reform from the Outside

Does cultural diversity hinder the implementation of IMF-supported programs? An empirical investigation

International monetary fund conditionality and structural reforms: Evidence from developing countries

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