Do IMF and World Bank programs induce government crises An empirical analysis
AbstractWe examine whether and under which circumstances World Bank projects and IMF programs affect the likelihood of major government crises. Using a sample of more than 90 developing countries over the period 1970-2002, we find that crises are on average more likely in the presence of Bank and Fund involvement. While the effect of the IMF to some extent depends on the model specification, the impact of the World Bank is shown to be robust to the choice of control variables and method of estimation. We also find that governments face an increasing risk to enter a crisis when they remain under IFI programs when the economy performs better. The (economic) conditions present when a new IFI program is initiated, however, do not play a major role for crisis probability. Finally, only programs concluded by the current government affect crises, while those inherited by preceding governments do not. --
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Bibliographic InfoPaper provided by Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Zurich 2008 with number 13.
Date of creation: 2008
Date of revision:
Political Crisis; International Financial Institutions;
Other versions of this item:
- Dreher, Axel & Gassebner, Martin, 2012. "Do IMF and World Bank Programs Induce Government Crises? An Empirical Analysis," International Organization, Cambridge University Press, Cambridge University Press, vol. 66(02), pages 329-358, April.
- Axel Dreher & Martin Gassebner, 2008. "Do IMF and World Bank programs induce government crises? An empirical analysis," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 08-200, KOF Swiss Economic Institute, ETH Zurich.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- P48 - Economic Systems - - Other Economic Systems - - - Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
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- Christoph Moser & Jan-Egbert Sturm, 2011.
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- Christoph Moser & Jan-Egbert Sturm, 2011. "Explaining IMF Lending Decisions after the Cold War," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 11-279, KOF Swiss Economic Institute, ETH Zurich.
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CESifo Working Paper Series
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- Toke, A.S. & Albornoz, F. & Gassebner, M., 2012. "The Golden Hello and Political Transitions," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 1241, Faculty of Economics, University of Cambridge.
- Martin Gassebner & Facundo Albornoz & Toke S. Aidt, 2012. "The Golden Hello and Political Transitions," KOF Working papers, KOF Swiss Economic Institute, ETH Zurich 12-316, KOF Swiss Economic Institute, ETH Zurich.
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