Prior actions are measures that need to be implemented prior to Board approval of an IMFsupported program. This paper examines whether such prior actions can signal a willingness to implement reforms, especially when the member's track record is weak. We find some support for this signaling role, particularly for programs supported by the General Resources Account (GRA). Controlling for the member's previous track record, prior actions are associated with greater compliance with other structural conditions, suggesting their possible use as a screening device. Moreover, prior actions set at program approval serve as a useful screening device and strengthen the macroeconomic targets set out in the IMF-supported program. The results also reveal a demonstrable screening effect on growth over the medium term, since the growth impact of the ratio of prior actions at the outset versus the rest of the program is significantly positive while the total number of prior actions is not statistically significant.
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Paper provided by International Monetary Fund in its series IMF Working Papers with number
06/213.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004.
"Do Institutions Cause Growth?,"
Journal of Economic Growth,
Springer, vol. 9(3), pages 271-303, 09.
[Downloadable!]
Other versions:
Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer, 2004.
"Do Institutions Cause Growth?,"
NBER Working Papers
10568, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Francisco Alcalá & Antonio Ciccone, 2001.
"Trade and Productivity,"
Economics Working Papers
580, Department of Economics and Business, Universitat Pompeu Fabra, revised Jul 2002.
[Downloadable!]
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