The effect of IMF programs on economic growth

Przeworski, Adam; Vreeland, James Raymond

doi:10.1016/s0304-3878(00)00090-0

Cited by 432 publications

(322 citation statements)

References 15 publications

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“…For evidence that IMF lending reduces growth see Barro & Lee (2005), Bordo & Schwartz (2000), and Przeworski & Vreeland (2000), for evidence of the beneficial effects of IMF programs for growth see Dicks-Mireaux et al (2000), Evrensel (2002), andHutchison (2004). Ul Haque & Kahn (1998) and Steinwand & Stone (2008) provide a more detailed summary about the effects of participation in IMF programs on macroeconomic variables such as economic growth, inflation, balance of payments, and current account deficits.…”

Section: Empirical Findingsmentioning

confidence: 99%

“…Second, we are confronted with an endogeneity problem, as the choice of a country whether to participate in a program is not made randomly. Countries which are more likely to join an IMF agreement generally face specific macroeconomic conditions that make them eligible for participation in programs (Przeworski & Vreeland 2000). These differences, which could themselves influence poverty and/or income distribution, have to be controlled for, otherwise leading to biased estimates of the effect of program participation.…”

Section: Estimation Frameworkmentioning

confidence: 99%

“…By allowing for country fixed effects we take into account differences in levels of poverty and inequality. 19 See Conway (1994), Dreher & Walter (2010), Goldstein & Montiel (1986), Przeworski & Vreeland (2000), and Vreeland (2002). and can be interpreted as the effect of program participation on poverty or income distribution, respectively.…”

Section: Treatment Effects Modelmentioning

confidence: 99%

See 2 more Smart Citations

Revisiting the Effects of IMF Programs on Poverty and Inequality

Oberdabernig

2013

World Development

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Section: Empirical Findingsmentioning

confidence: 99%

Section: Estimation Frameworkmentioning

confidence: 99%

Section: Treatment Effects Modelmentioning

confidence: 99%

See 1 more Smart Citation

Revisiting the Effects of IMF Programs on Poverty and Inequality

Oberdabernig

2013

World Development

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“…Also, he indicated that significant improvement achieved in terms of current account and foreign exchange reserves, could not be sustained after the duration of the programme. Also, Przeworski and Vreeland (2000), using data from 1951 to 1990, show that countries in a programme lowered their growth rates, which otherwise grew faster once they left the programme.…”

Section: Literature Reviewmentioning

confidence: 99%

Institutional Quality, Macroeconomic Stabilization and Economic Growth: A Case Study of IMF Programme Countries

Javed¹

2016

The Economic Impact of International Monetary Fund Programmes

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The current study is motivated by the overall lackluster performance of IMF p rogrammes in recip ient countries in terms of econo mic growth consequences, and tries to explore the relevance of institutional determinants (that have a positively significant role in improving institutional quality in IMF programme countries, in the first place) in enhancing real economic growth in IM F programme countries; as otherwise highlighted by New Institutional Econo mics literature for countries generally. Moreover, the study also investigates the impact of these determinants through the channel of macroeconomic stability. Based on a time period of 1980-2010 (co inciding with a durat ion of increasing nu mber of IMF p rogrammes), the results mainly validate that institutional determinants overall play a positive role in reducing macroeconomic instability, and through it, and also independently, enhance real economic growth.

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“…Third, the effects of IMF programs are more positive, rather than less so, in countries that have 1 Przeworski and Vreeland (2000) made an important advance by pointing out that initiating an IMF program requires the consent of two agents, a government and the IMF. This implies that two selection equations are needed to model the process of program approval.…”

mentioning

confidence: 99%

Adverse selection and growth under IMF programs

Bas

Stone

2013

Rev Int Organ

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The dominant approach to studying the effects of IMF programs has emphasized moral hazard, but we find that adverse selection has more impressive effects. We propose a novel strategic selection model to study the growth effects of IMF programs, which allows for the possibility of adverse selection. We find that adverse selection occurs: the countries that are most interested in participating in IMF programs are the least likely to have favorable growth outcomes. Controlling for this selection effect, we find that countries benefit from IMF programs on average in terms of higher growth rates, but that some countries benefit from participation, while others are harmed. Moral hazard predicts that long-term users of Fund resources benefit least from participating in programs, while adverse selection predicts the opposite. Contrary to previous findings, we find that IMF programs have more successful growth performance among long-term users than among short-term users.

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The effect of IMF programs on economic growth

Cited by 432 publications

References 15 publications

Revisiting the Effects of IMF Programs on Poverty and Inequality

Revisiting the Effects of IMF Programs on Poverty and Inequality

Institutional Quality, Macroeconomic Stabilization and Economic Growth: A Case Study of IMF Programme Countries

Adverse selection and growth under IMF programs

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