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Do IMF Programs Improve Economic Governance?

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  • Jiro Honda
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    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.

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    Bibliographic Info

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

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

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    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;

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