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Stop Interrupting: An Empirical Analysis of the Implementation of IMF Programs

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  • Arpac, Ozlem
  • Bird, Graham
  • Mandilaras, Alex

Abstract

Summary For many years the analysis of IMF conditionality overlooked the extent to which it was implemented. However, more recently, increasing attention has been paid to implementation. Theoretical contributions have focused on the importance of special interest groups, but empirical evidence has failed to provide compelling support for the theory. Indeed, empirical studies have reported mixed results that sometimes seem to be conflicting. This paper identifies a range of economic, political and institutional factors that may, in principle, influence implementation. Focusing in particular on the irreversible interruption of IMF programs, it tests an econometric model designed to capture these influences 'over 1992-2004' exploiting improved sources of data. The results suggest that significant determinants of interruption are trade openness, the existence of veto players and the amount of resources committed by the Fund. The paper interprets the results, tests their robustness, briefly examines cases that initially appear to be inconsistent with the overall findings and discusses the implications of the results for policy.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 36 (2008)
Issue (Month): 9 (September)
Pages: 1493-1513

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Handle: RePEc:eee:wdevel:v:36:y:2008:i:9:p:1493-1513
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

Keywords: IMF implementation;

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  1. Dollar, David & Svensson, Jakob, 1998. "What explains the success or failure of structural adjustment programs?," Policy Research Working Paper Series 1938, The World Bank.
  2. Wolfgang Mayer & Alex Mourmouras, 2004. "IMF Conditionality and the Theory of Special Interest Politics1," Comparative Economic Studies, Palgrave Macmillan, vol. 46(3), pages 400-422, September.
  3. Graham Bird, 2006. "The Implementation of IMF Programs: A Conceptual Framework," School of Economics Discussion Papers 1506, School of Economics, University of Surrey.
  4. Haggard, Stephan, 1985. "The politics of adjustment: lessons from the IMF's Extended Fund Facility," International Organization, Cambridge University Press, vol. 39(03), pages 505-534, June.
  5. Pritchett, Lant, 1996. "Measuring outward orientation in LDCs: Can it be done?," Journal of Development Economics, Elsevier, vol. 49(2), pages 307-335, May.
  6. Bird, Graham, 1996. "Borrowing from the IMF: The policy implications of recent empirical research," World Development, Elsevier, vol. 24(11), pages 1753-1760, November.
  7. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
  8. Michael Mussa & Miguel Savastano, 2000. "The IMF Approach to Economic Stabilization," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 79-128 National Bureau of Economic Research, Inc.
  9. Polak, J.J., 1991. "The Changing Nature of IMF Conditionality," Princeton Studies in International Economics 184, International Economics Section, Departement of Economics Princeton University,.
  10. Anna Unigovskaya & Valerie Mercer-Blackman, 2000. "Compliance with IMF Program Indicators and Growth in Transition Economies," IMF Working Papers 00/47, International Monetary Fund.
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  12. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  13. Jacques J. Polak, 1991. "The Changing Nature of IMF Conditionality," OECD Development Centre Working Papers 41, OECD Publishing.
  14. Graham Bird & Dane Rowlands, 2002. "The Pattern of IMF Lending: An Analysis of Prediction Failures," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(3), pages 173-186.
  15. Edwards, Sebastian, 1989. "The international monetary fund and the developing countries: A critical evaluation," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 31(1), pages 7-68, January.
  16. Roubini, Nouriel & Sachs, Jeffrey D., 1989. "Political and economic determinants of budget deficits in the industrial democracies," European Economic Review, Elsevier, vol. 33(5), pages 903-933, May.
  17. Axel Dreher, 2003. "The influence of elections on IMF programme interruptions," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 101-120.
  18. Joseph P. Joyce, 2006. "Promises Made, Promises Broken: A Model Of Imf Program Implementation," Economics and Politics, Wiley Blackwell, vol. 18(3), pages 339-365, November.
  19. Conway, Patrick, 1994. "IMF lending programs: Participation and impact," Journal of Development Economics, Elsevier, vol. 45(2), pages 365-391, December.
  20. Ashoka Mody & Diego Saravia, 2006. "Catalysing Private Capital Flows: Do IMF Programmes Work as Commitment Devices?," Economic Journal, Royal Economic Society, vol. 116(513), pages 843-867, 07.
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Cited by:

  1. Ozlem Arpac & Graham Bird, 2009. "Turkey and the IMF: A case study in the political economy of policy implementation," The Review of International Organizations, Springer, vol. 4(2), pages 135-157, June.
  2. Öhler, Hannes & Nunnenkamp, Peter & Dreher, Axel, 2010. "Does conditionality work? A test for an innovative US aid scheme," Center for European, Governance and Economic Development Research Discussion Papers 103, University of Goettingen, Department of Economics.
  3. Hannes Öhler & Peter Nunnenkamp & Axel Dreher, 2010. "Does Conditionality Work? A Test for an Innovative US Aid Scheme," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 34, Courant Research Centre PEG.
  4. Molly Bauer & Cesi Cruz & Benjamin Graham, 2012. "Democracies only: When do IMF agreements serve as a seal of approval?," The Review of International Organizations, Springer, vol. 7(1), pages 33-58, March.
  5. Doris A. Oberdabernig, 2012. "Revisiting the Effects of IMF Programs on Poverty and Inequality," Department of Economics Working Papers wuwp144, Vienna University of Economics and Business, Department of Economics.
  6. Javed, Omer, 2014. "Institutional quality, macroeconomic stabilization and economic growth: a case study of IMF programme countries," MPRA Paper 56370, University Library of Munich, Germany.
  7. Csaba, László, 2011. "A magyar átalakulás és fejlődés néhány általánosítható elméleti tanulsága
    [Some generalizable theoretical lessons of the Hungarian transformation and development]    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 813-831.
  8. Javed, Omer, 2013. "Determinants of Institutional Quality: A Case Study of IMF Programme Countries," MPRA Paper 51344, University Library of Munich, Germany.

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