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Growth-oriented adjustment programs: A statistical analysis


  • Faini, Riccardo
  • De Melo, Jaime
  • Senhadji, Abdelhak
  • Stanton, Julie


This paper gives a statistical analysis of economic performance under International Monetary Fund (IMF) — World Bank (WB) growth-oriented adjustment programs, The evaluation is based on a sample of 93 countries and makes a comparison of the average values of economic indicators during 1982–86 with the corresponding values during 1978–81. The methodology controls for the external environment and for initial conditions. The paper finds no evidence of a statistically better (or worse) growth performance for loan recipient countries.The paper then examines the investment-output relationship for a group of 14 countries that received a large number of growth-oriented adjustment loans. An estimate is provided of the foregone growth because of lower aggregate investment !'luring the period of adjustment. The paper concludes that the desired signs of a sustainable recovery through higher investment were not evident, at least through 1986.
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  • Faini, Riccardo & De Melo, Jaime & Senhadji, Abdelhak & Stanton, Julie, 1991. "Growth-oriented adjustment programs: A statistical analysis," World Development, Elsevier, vol. 19(8), pages 957-967, August.
  • Handle: RePEc:eee:wdevel:v:19:y:1991:i:8:p:957-967

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    References listed on IDEAS

    1. Cornia, Giovanni Andrea & Jolly, Richard & Stewart, Frances (ed.), 1987. "Adjustment with a Human Face: Volume 1, Protecting the Vulnerable and Promoting Growth," OUP Catalogue, Oxford University Press, number 9780198286097, June.
    2. Jeffrey Sachs & Harry Huizinga, 1987. "U.S. Commercial Banks and the Developing-Country Debt Crisis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(2), pages 555-606.
    3. Rudiger Dornbusch, 1991. "Credibility and Stabilization," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 837-850.
    4. Kiviet, Jan F., 1985. "Model selection test procedures in a single linear equation of a dynamic simultaneous system and their defects in small samples," Journal of Econometrics, Elsevier, vol. 28(3), pages 327-362, June.
    5. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 38(2), pages 112-134.
    6. Buffie, Edward F., 1986. "Devaluation, investment and growth in LDCs," Journal of Development Economics, Elsevier, vol. 20(2), pages 361-379, March.
    7. Dadkhah, Kamran M & Zahedi, Fatemeh, 1986. "Simultaneous Estimation of Production Functions and Capital Stocks for Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 443-451, August.
    8. Rudiger Dornbusch, 1985. "Policy and Performance Links between LDC Debtors and Industrial Nations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 303-368.
    9. Mario I. Blejer & Mohsin S. Khan, 1984. "Government Policy and Private Investment in Developing Countries (Politique des pouvoirs publics et investissement privé dans les pays en développement) (Política estatal e inversión privada en lo," IMF Staff Papers, Palgrave Macmillan, vol. 31(2), pages 379-403, June.
    10. Buffie, Edward F., 1984. "The macroeconomics of trade liberalization," Journal of International Economics, Elsevier, vol. 17(1-2), pages 121-137, August.
    11. Balassa, Bela, 1988. "Quantitative appraisal of adjustment lending," Policy Research Working Paper Series 79, The World Bank.
    12. Jan F. Kiviet, 1986. "On the Rigour of Some Misspecification Tests for Modelling Dynamic Relationships," Review of Economic Studies, Oxford University Press, vol. 53(2), pages 241-261.
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    Cited by:

    1. Nunnenkamp, Peter, 1995. "Wirtschaftsreformen in Entwicklungs- und Transformationsländern: Anreizprobleme, Glaubwürdigkeitsdefizite und die Erfolgschancen umfassender Reformen," Open Access Publications from Kiel Institute for the World Economy 1636, Kiel Institute for the World Economy (IfW).
    2. de Melo, Jaime & Dhar, Sumana, 1992. "Lessons of trade liberalization in Latin America for economies in transition," Policy Research Working Paper Series 1040, The World Bank.
    3. Elbadawi, Ibrahim A. & Ghura, Dhaneshwar & Uwujaren, Gilbert, 1992. "World Bank adjustment lending and economic performance in sub-Saharan Africa in the 1980s : a comparison with other low income countries," Policy Research Working Paper Series 1000, The World Bank.
    4. de Melo, Jaime & Montenegro, Claudio & Panagariya, Arvind, 1992. "Regional integration, old and new," Policy Research Working Paper Series 985, The World Bank.
    5. 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.
    6. Buffie, Edward F. & Won, Yongkul, 2001. "Devaluation and investment in an optimizing model of the small open economy," European Economic Review, Elsevier, vol. 45(8), pages 1461-1499, August.
    7. Rose, Pauline, 1995. "Female education and adjustment programs: A crosscountry statistical analysis," World Development, Elsevier, vol. 23(11), pages 1931-1949, November.
    8. Jinjarak, Yothin & Salinas, Gonzalo & Tsikata, Yvonne M., 2013. "The effect of World Bank trade adjustment assistance on trade and growth, 1987–2004: Is the glass half full or half empty?," Economic Systems, Elsevier, vol. 37(3), pages 415-430.
    9. Tarp, Finn, 1994. "De makroøkonomiske reformer i teoretisk belysning
      [Macroeconomic Reforms in Theoretical Context]
      ," MPRA Paper 64206, University Library of Munich, Germany.
    10. Devarajan, Shantayanan & de Melo, Jaime, 1990. "Membership in the CFA zone : Odyssean journey or Trojan horse?," Policy Research Working Paper Series 482, The World Bank.
    11. Haddad, Lawrence & Brown, Lynn R. & Richter, Andrea & Smith, Lisa, 1995. "The gender dimensions of economic adjustment policies: Potential interactions and evidence to date," World Development, Elsevier, vol. 23(6), pages 881-896, June.

    More about this item

    JEL classification:

    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship


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