Do IMF and World Bank Programs Induce Government Crises? An Empirical Analysis
AbstractWe examine whether and under which circumstances World Bank projects and IMF programs affect the likelihood of major government crises. Using a sample of more than 90 developing countries over the period 1970-2002, we find that crises are on average more likely in the presence of Bank and Fund involvement. While the effect of the IMF to some extent depends on the model specification, the impact of the World Bank is shown to be robust to the choice of control variables and method of estimation. We also find that governments face an increasing risk to enter a crisis when they remain under IFI programs when the economy performs better. The (economic) conditions present when a new IFI program is initiated, however, do not play a major role for crisis probability. Finally, only programs concluded by the current government affect crises, while those inherited by preceding governments do not. --
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Bibliographic InfoArticle provided by Cambridge University Press in its journal International Organization.
Volume (Year): 66 (2012)
Issue (Month): 02 (April)
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Other versions of this item:
- Axel Dreher & Martin Gassebner, 2008. "Do IMF and World Bank programs induce government crises? An empirical analysis," KOF Working papers 08-200, KOF Swiss Economic Institute, ETH Zurich.
- Dreher, Axel & Gassebner, Martin, 2008. "Do IMF and World Bank programs induce government crises An empirical analysis," Proceedings of the German Development Economics Conference, Zurich 2008 13, Verein für Socialpolitik, Research Committee Development Economics.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
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- Toke S. Aidt & Facundo Albornoz & Martin Gassebner, 2012.
"The Golden Hello and Political Transitions,"
CESifo Working Paper Series
3957, CESifo Group Munich.
- Toke, A.S. & Albornoz, F. & Gassebner, M., 2012. "The Golden Hello and Political Transitions," Cambridge Working Papers in Economics 1241, Faculty of Economics, University of Cambridge.
- Martin Gassebner & Facundo Albornoz & Toke S. Aidt, 2012. "The Golden Hello and Political Transitions," KOF Working papers 12-316, KOF Swiss Economic Institute, ETH Zurich.
- Aidt, Toke & Albornoz, Facundo & Gassebner, Martin, 2010. "The Golden Halo and Political Transitions," Proceedings of the German Development Economics Conference, Hannover 2010 48, Verein für Socialpolitik, Research Committee Development Economics.
- Christoph Moser & Jan-Egbert Sturm, 2011.
"Explaining IMF lending decisions after the Cold War,"
The Review of International Organizations,
Springer, vol. 6(3), pages 307-340, September.
- Christoph Moser & Jan-Egbert Sturm, 2011. "Explaining IMF Lending Decisions after the Cold War," KOF Working papers 11-279, KOF Swiss Economic Institute, ETH Zurich.
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