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Over-optimism and the IMF

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  • Graham Bird

    (University of Surrey)

Abstract

One way of assessing the impact of IMF programmes is to see whether performance and policy targets are achieved. However, does a failure to hit targets mean that the programmes have been unsuccessful, or could it be that targets have been too ambitious? This paper analyses political economy factors impinging on governments and on the IMF that may lead to serial over‐optimism. It goes on to examine the empirical evidence that is consistent with over‐optimism. Having considered whether over‐optimism is a cause for concern, and concluded that it is, the paper considers reforms that would allow realism to replace it. By eliminating over‐optimism it is argued that the psychology of failure surrounding IMF programmes could be significantly reduced or even broken.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Graham Bird, 2005. "Over-optimism and the IMF," School of Economics Discussion Papers 0505, School of Economics, University of Surrey.
  • Handle: RePEc:sur:surrec:0505
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    File URL: https://repec.som.surrey.ac.uk/2005/DP05-05.pdf
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    References listed on IDEAS

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    9. Hutchison, Michael M. & Noy, Ilan, 2003. "Macroeconomic effects of IMF-sponsored programs in Latin America: output costs, program recidivism and the vicious cycle of failed stabilizations," Journal of International Money and Finance, Elsevier, vol. 22(7), pages 991-1014, December.
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    11. International Monetary Fund, 1998. "Do IMF-Supported Programs Work? A Survey of the Cross-Country Empirical Evidence," IMF Working Papers 1998/169, International Monetary Fund.
    12. Ramkishen Rajan & Graham Bird, 2001. "Economic Globalisation," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(3), pages 1-18, July.
    13. Przeworski, Adam & Vreeland, James Raymond, 2000. "The effect of IMF programs on economic growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 385-421, August.
    14. Graham Bird, 2002. "The Completion Rate of IMF Programmes: What We Know, Don’t Know and Need to Know," The World Economy, Wiley Blackwell, vol. 25(6), pages 833-847, June.
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    Cited by:

    1. ., 2016. "Introduction and overview: the purposes and operations of the IMF," Chapters, in: The International Monetary Fund, chapter 1, pages 1-18, Edward Elgar Publishing.
    2. Bernhard Reinsberg & Thomas Stubbs & Alexander Kentikelenis, 2022. "Compliance, defiance, and the dependency trap: International Monetary Fund program interruptions and their impact on capital markets," Regulation & Governance, John Wiley & Sons, vol. 16(4), pages 1022-1041, October.
    3. Olaf Hübler & Lukas Menkhoff & Chodechai Suwanaporn, 2008. "Financial Liberalisation in Emerging Markets: How Does Bank Lending Change?," The World Economy, Wiley Blackwell, vol. 31(3), pages 393-415, March.
    4. Martin Iseringhausen & Ms. Mwanza Nkusu & Wellian Wiranto, 2019. "Repeated Use of IMF-Supported Programs: Determinants and Forecasting," IMF Working Papers 2019/245, International Monetary Fund.
    5. Bessma Momani, 2007. "IMF staff: Missing link in fund reform proposals," The Review of International Organizations, Springer, vol. 2(1), pages 39-57, March.

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