Thomas Barnebeck Andersen (Institute of Economics, University of Copenhagen) Thomas Harr (Institute of Economics, University of Copenhagen) Finn Tarp (Institute of Economics, University of Copenhagen)
Additional information is available for the following
registered author(s):
The political factors, which shape IMF lending to LDCs, have attracted much attention. The same goes for the role and influence of the US. However, formal modelling is scant. In this paper, we assume that the US is principal within the IMF and seeks to maximize its impact on the policy stance of debtor countries. We derive the optimal loan allocation mechanism, and test the hypothesis that the probability of an IMF loan is increasing in the amount of political concessions countries make. A political concession is defined as the distance between a country’s bliss point and its actual policy stance measured relative to the US. We propose a bliss-point proxy and test our hypothesis in a sample of 68 countries during the period 1986-94. There is support for our hypothesis in the data. Finally, we show that omitting bliss points may lead to endogeneity bias in empirical work.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Publisher Info
Paper provided by University of Copenhagen. Department of Economics in its series Discussion Papers with number
04-11.
Length: 30 pages Date of creation: Aug 2004 Date of revision: Handle: RePEc:kud:kuiedp:0411
Contact details of provider: Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark Phone: (+45) 35 32 26 26 Fax: +45 35 32 30 00 Web page: http://www.econ.ku.dk More information through EDIRC
Order Information: Email:
For technical questions regarding this item, or to correct its listing, contact: (Henriette Aabo Hansen).
Find related papers by JEL classification: F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions F34 - International Economics - - International Finance - - - International Lending and Debt Problems O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
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.:
Roger B. Myerson, 1978.
"Optimal Auction Design,"
Discussion Papers
362, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!]
Gourieroux, C. & Monfort, A., 1986.
"Testing non-nested hypotheses,"
Handbook of Econometrics,
in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 44, pages 2583-2637
Elsevier.
[Downloadable!] (restricted)
Cited by: (explanations, 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.)