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IMF Lending in Times of Crisis: Political Influences and Crisis Prevention

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  • Presbitero, Andrea F.
  • Zazzaro, Alberto

Abstract

In the wake of the global crisis the International Monetary Fund (IMF) has increased its exposure to developing countries and modified its lending approach to enhance its crisis prevention role. In this paper we examine whether, during the current crisis, IMF lending was actually directed at preventing the spread of the crisis and whether participation in IMF programs was sensitive to the politico-economic interests of the Fund’s main shareholders. We find that the political similarity with G7 countries is positively correlated with the probability of entering a loan agreement, while the harsher the crisis and the exposure of foreign banks in the country, the larger the loan granted by the IMF.

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Bibliographic Info

Article provided by Elsevier in its journal World Development.

Volume (Year): 40 (2012)
Issue (Month): 10 ()
Pages: 1944-1969

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Handle: RePEc:eee:wdevel:v:40:y:2012:i:10:p:1944-1969

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Web page: http://www.elsevier.com/locate/worlddev

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Keywords: global crisis; IMF lending; low- and middle-income countries;

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Cited by:
  1. Luca Papi & Andrea Filippo Presbitero & Alberto Zazzaro, 2013. "IMF Lending and Banking Crises," Mo.Fi.R. Working Papers 80, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  2. Christian Mumssen & Yasemin Bal-Gunduz & Christian Ebeke & Linda Kaltani, 2013. "IMF-Supported Programs in Low Income Countries: Economic Impact over the Short and Longer Term," IMF Working Papers 13/273, International Monetary Fund.

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