Stigma or Cushion? IMF Programs and Sovereign Creditworthiness

Gehring, Kai; Lang, Valentin

doi:10.2139/ssrn.3169341

Cited by 8 publications

(22 citation statements)

References 73 publications

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“… Variants of our instrument have also been used to instrument International Monetary Fund loans (Lang , Gehring and Lang , Stubbs et al. ) and World Bank lending (Dreher et al.…”

mentioning

confidence: 99%

Aid and growth: New evidence using an excludable instrument

Dreher

Langlotz

2020

Canadian J of Economics

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We use an excludable instrument to test the effect of bilateral foreign aid on economic growth in a sample of 97 recipient countries over the 1974-2013 period. Our instrument interacts donor government fractionalization with a recipient country's probability of receiving aid. The results show that fractionalization increases donors' aid budgets, representing the variation over time of our instrument, while the probability of receiving aid introduces variation across recipient countries. Controlling for countryand period-specific fixed effects that capture the levels of the interacted variables, the interaction provides a powerful and excludable instrument. Making use of the instrument, our results show a positive but insignificant effect of aid on growth. We also investigate the effect of aid on consumption, savings, investments and net exports and investigate heterogeneity according to the quality of economic policy, democracy and the Cold War period. We find that aid increases investment and consumption, while it decreases net exports. In no regression do we find that aid affects growth. However, the coefficients from the instrumental variables regressions are also not statistically different from the positive and significant OLS estimates. Résumé. Aide et croissance : nouveaux éléments de preuve grâce à un instrument exclusif. À l'aide d'un instrument exclusif, nous évaluons l'impact de l'aide étrangère bilatérale sur la croissance économique d'un échantillon de 97 pays bénéficiaires entre 1974 et 2013. Notre instrument met en interaction le fractionnement de l'aide apportée par les gouvernements contributeurs et la probabilité qu'un pays bénéficiaire puisse recevoir de l'aide extérieure. Les résultats suggèrent qu'en matière d'aide, le fractionnement entraîne une augmentation des budgets des pays contributeurs, constituant ainsi la

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“… Variants of our instrument have also been used to instrument International Monetary Fund loans (Lang , Gehring and Lang , Stubbs et al. ) and World Bank lending (Dreher et al.…”

mentioning

confidence: 99%

Aid and growth: New evidence using an excludable instrument

Dreher

Langlotz

2020

Canadian J of Economics

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“…Nonetheless, using initial or pre-determined values minimizes endogeneity concerns. 19 The idea is based on Lang (2016) and Gehring and Lang (2018), who employ such a supply-push identification approach using variation in the IMF's liquidity.…”

Section: Instrumenting Wb Aidmentioning

confidence: 99%

Aid and Conflict at the Subnational Level – Evidence from World Bank and Chinese Development Projects in Africa

2018

Self Cite

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Using geo-referenced data on development projects by the World Bank and China, we provide a comprehensive analysis of the effect of aid on conflict using fixed effects and instrumental variables strategies. The results show that aid projects seem to reduce rather than fuel conflict, on average. Our analysis suggests that this is driven by projects in the transport and financial sectors, and through less lethal violence by governments against civilians. There are no clear differences based on ethnic fractionalization and government affiliation of a region, but some indications of spill-overs to other regions. We also find no increased likelihood of demonstrations, strikes or riots, but a higher likelihood of non-lethal government repression in areas where China is active.

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“…Other approaches used newspaper articles to measure policy uncertainty in the US (Baker et al, 2016) and forecast stock prices using the sentiment of newspaper articles relating to particular companies (Tetlock, 2007). Finally, Gehring and Lang (2018) used the tone of credit rating agency statements to evaluate the impact of IMF programs.…”

Section: Introductionmentioning

confidence: 99%

Text-Mining Imf Country Reports – An Original Dataset

Mihalyi

Máté

2018

SSRN Journal

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This article introduces an original panel dataset based on the text of country reports by the International Monetary Fund. It consists of a total of 5561 Article IV consultation and program review documents, published between 2004 and 2018 on 201 countries. The text of these reports provide indications of the perceived policy weaknesses, economic risks, ongoing reforms and implemented or neglected policy advice. Thus the content of IMF reports are widely used in the economics, political science and IR literature. To our knowledge this is the first comprehensive dataset that aggregates these country reports.The paper gives a detailed account on the data acquisition and management process. To demonstrate and validate the dataset's application for research we present three validation exercises. We find that Article IV reports can indicate incoming institutional reforms, show changes in IMF policy advice over time and identify potential gains from recently discovered natural resources in certain cases. Taken together, this paper contributes an original dataset of IMF country reports and demonstrates how it can be a useful foundation for further research into the role of international financial institutions.

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Stigma or Cushion? IMF Programs and Sovereign Creditworthiness

Cited by 8 publications

References 73 publications

Aid and growth: New evidence using an excludable instrument

Aid and growth: New evidence using an excludable instrument

Aid and Conflict at the Subnational Level – Evidence from World Bank and Chinese Development Projects in Africa

Text-Mining Imf Country Reports – An Original Dataset

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