Advanced Search
MyIDEAS: Login

Do IMF Programs Improve Economic Governance?

Contents:

Author Info

  • Jiro Honda
Registered author(s):

    Abstract

    This paper examines the effects of IMF financial assistance on economic governance in developing countries, based on panel data analyses of perceived governance indicators. It uses a two-stage approach to address possible endogeneity issues. The results show that successful implementation of IMF programs is associated with improvements in the quality of economic governance. Specifically, the paper finds statistically robust results that IMF concessional programs through the Poverty Reduction and Growth Facility tend to enhance the rule of law and strengthen control of corruption. Through this exercise, however, no statistically significant effect is observed for assistances under the General Resource Account.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=21918
    Download Restriction: no

    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/114.

    as in new window
    Length: 32
    Date of creation: 01 May 2008
    Date of revision:
    Handle: RePEc:imf:imfwpa:08/114

    Contact details of provider:
    Postal: International Monetary Fund, Washington, DC USA
    Phone: (202) 623-7000
    Fax: (202) 623-4661
    Email:
    Web page: http://www.imf.org/external/pubind.htm
    More information through EDIRC

    Order Information:
    Web: http://www.imf.org/external/pubs/pubs/ord_info.htm

    Related research

    Keywords: Economic reforms; Fund; Financial assistance; Developing countries; Poverty Reduction and Growth Facility; Fund general resources; government effectiveness; governance indicators; good governance; dummy variables; governance indicator; statistics; governance issues; correlation; governance research; quality of governance; anticorruption; data analyses; probability; worldwide governance research indicators; correlations; commitment to policies; institutional quality; improving governance; dummy variable; explanatory power; empirical framework; survey; statistically significant effect; bureaucratic quality; probabilities; governance quality; fighting corruption; predictability; samples; governance institutions; governance problems; incidence of corruption; determinants of governance; anticorruption measures; declines in governance; equation; sample selection; improvements in governance; national governance; linear model; anticorruption efforts; governance reforms; empirical model; surveys; institutional measures; forecasting; deterioration in governance;

    This paper has been announced in the following NEP Reports:

    References

    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.:
    as in new window
    1. Kwabena Gyimah-Brempong, 2002. "Corruption, economic growth, and income inequality in Africa," Economics of Governance, Springer, vol. 3(3), pages 183-209, November.
    2. Boockmann, Bernhard & Dreher, Axel, 2003. "The contribution of the IMF and the World Bank to economic freedom," European Journal of Political Economy, Elsevier, vol. 19(3), pages 633-649, September.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output Per Worker Than Others?," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 83-116, February.
    4. Conway, Patrick, 1994. "IMF lending programs: Participation and impact," Journal of Development Economics, Elsevier, vol. 45(2), pages 365-391, December.
    5. Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
    6. Alberto Chong & Luisa Zanforlin, 2000. "Law tradition and institutional quality: some empirical evidence," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(8), pages 1057-1068.
    7. Dreher, Axel, 2006. "IMF and economic growth: The effects of programs, loans, and compliance with conditionality," World Development, Elsevier, vol. 34(5), pages 769-788, May.
    8. Johann Graf Lambsdorff, 2003. "How Corruption Affects Productivity," Kyklos, Wiley Blackwell, vol. 56(4), pages 457-474, November.
    9. Helge Berger & Jakob de Haan & Jan-Egbert Sturm, 2005. "Which Variables Explain Decisions on IMF Credit? An Extreme Bounds Analysis ," TWI Research Paper Series 13, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    10. Knight, Malcolm & Santaella, Julio A., 1997. "Economic determinants of IMF financial arrangements," Journal of Development Economics, Elsevier, vol. 54(2), pages 405-436, December.
    11. Naci Mocan, 2008. "What Determines Corruption? International Evidence From Microdata," Economic Inquiry, Western Economic Association International, vol. 46(4), pages 493-510, October.
    12. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
    13. Shang-Jin Wei, 2000. "Natural openness and good government," Policy Research Working Paper Series 2411, The World Bank.
    14. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
    15. Mo, Pak Hung, 2001. "Corruption and Economic Growth," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 66-79, March.
    16. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
    17. Knack, Stephen & Azfar, Omar, 2000. "Are larger countries really more corrupt?," Policy Research Working Paper Series 2470, The World Bank.
    18. Islam, Roumeen & Montenegro, Claudio E., 2002. "What determines the quality of institutions?," Policy Research Working Paper Series 2764, The World Bank.
    19. Eugenio Cerutti, 2007. "Imf Drawing Programs," IMF Working Papers 07/152, International Monetary Fund.
    20. Ciocchini, Francisco & Durbin, Erik & Ng, David T.C., 2003. "Does Corruption Increase Emerging Market Bond Spreads?," Working Papers 127179, Cornell University, Department of Applied Economics and Management.
    21. International Monetary Fund, 1998. "Do IMF-Supported Programs Work? a Survey of the Cross-Country Empirical Evidence," IMF Working Papers 98/169, International Monetary Fund.
    22. Stiglitz, Joseph E, 1999. "The World Bank at the Millennium," Economic Journal, Royal Economic Society, vol. 109(459), pages F577-97, November.
    23. Morris Goldstein & Peter Montiel, 1986. "Evaluating Fund Stabilization Programs with Multicountry Data: Some Methodological Pitfalls (Evaluation des programmes de stabilisation du Fonds à partir de données sur divers pays: quelques éc," IMF Staff Papers, Palgrave Macmillan, vol. 33(2), pages 304-344, June.
    24. Aymo Brunetti & Beatrice Weder, 1998. "Investment and institutional uncertainty: A comparative study of different uncertainty measures," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 134(3), pages 513-533, September.
    25. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Governance matters," Policy Research Working Paper Series 2196, The World Bank.
    26. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    27. Raymond Fisman & Shang-Jin Wei, 2009. "The Smuggling of Art, and the Art of Smuggling: Uncovering the Illicit Trade in Cultural Property and Antiques," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 82-96, July.
    28. Robert J. Barro & Jong-Wha Lee, 2002. "IMF Programs: Who is Chosen and What Are the Effects?," NBER Working Papers 8951, National Bureau of Economic Research, Inc.
    29. Laffont, Jean-Jacques & N'Guessan, Tchetche, 1999. "Competition and corruption in an agency relationship," Journal of Development Economics, Elsevier, vol. 60(2), pages 271-295, December.
    30. F. Rozwadowski & Siddharth Timari & David O. Robinson & Susan Schadler, 1993. "Economic Adjustment in Low-Income Countries," IMF Occasional Papers 106, International Monetary Fund.
    31. Brautigam, Deborah A & Knack, Stephen, 2004. "Foreign Aid, Institutions, and Governance in Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 255-85, January.
    32. Dicks-Mireaux, Louis & Mecagni, Mauro & Schadler, Susan, 2000. "Evaluating the effect of IMF lending to low-income countries," Journal of Development Economics, Elsevier, vol. 61(2), pages 495-526, April.
    33. Svensson, Jakob, 2000. "Foreign aid and rent-seeking," Journal of International Economics, Elsevier, vol. 51(2), pages 437-461, August.
    34. Devesh KAPUR & Richard WEBB, 2000. "Governance-Related Conditionalities Of The International Financial Institutions," G-24 Discussion Papers 6, United Nations Conference on Trade and Development.
    35. Carlos Leite & Jens Weidmann, 1999. "Does Mother Nature Corrupt," IMF Working Papers 99/85, International Monetary Fund.
    36. Fahim Al-Marhubi, 2004. "The Determinants of Governance: A Cross-Country Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 22(3), pages 394-406, 07.
    37. Pastor, Manuel Jr., 1987. "The effects of IMF programs in the Third World: Debate and evidence from Latin America," World Development, Elsevier, vol. 15(2), pages 249-262, February.
    38. Yongzheng Yang & Robert Powell & Sanjeev Gupta, 2005. "The Macroeconomic Challenges of Scaling Up Aid to Africa," IMF Working Papers 05/179, International Monetary Fund.
    39. Dhaneshwar Ghura, 1998. "Tax Revenue in Sub-Saharan Africa," IMF Working Papers 98/135, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:08/114. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.