IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

IMF conditionality: theory and evidence

Listed author(s):
  • Axel Dreher

    ()

This article analyzes whether and to what extent reliance on conditionality is appropriate to guarantee the revolving character of Fund resources. The paper presents theoretical arguments in favour of conditionality, and those against the use of conditions. It summarizes the track record of program implementation and discusses the evidence of factors determining implementation. Whether proponents or critics of conditionality can be supported by existing data analysis is also investigated, as is the success of conditionality in terms of outcomes. The final section draws policy implications.

(This abstract was borrowed from another version of this item.)

If you experience problems downloading a file, check if you have the proper application to view it first. 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.

File URL: http://hdl.handle.net/10.1007/s11127-009-9486-z
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Springer in its journal Public Choice.

Volume (Year): 141 (2009)
Issue (Month): 1 (October)
Pages: 233-267

as
in new window

Handle: RePEc:kap:pubcho:v:141:y:2009:i:1:p:233-267
DOI: 10.1007/s11127-009-9486-z
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/public+finance/journal/11127/PS2

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.:

as
in new window

  1. S. Nuri Erbas, 2004. "IMF Conditionality and Program Ownership : A Case for Streamlined Conditionality," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(3), pages 10-25, May.
  2. Silvia Marchesi & Laura Sabani, 2007. "IMF concern for reputation and conditional lending failure: theory and empirics," Working Papers 114, University of Milano-Bicocca, Department of Economics, revised 2007.
  3. Kanbur, Ravi, 2003. "The Economics of International Aid," Working Papers 127784, Cornell University, Department of Applied Economics and Management.
  4. Michaelowa, Katharina, 2002. "The political economy of the enhanced HIPC-initiative," HWWA Discussion Papers 161, Hamburg Institute of International Economics (HWWA).
  5. Graham Bird & Dane Rowlands, 1997. "The Catalytic Effect of Lending by the International Financial Institutions," The World Economy, Wiley Blackwell, vol. 20(7), pages 967-991, November.
  6. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2006. "Does Aid for Education Educate Children? Evidence from Panel Data," KOF Working papers 06-146, KOF Swiss Economic Institute, ETH Zurich.
  7. Vreeland,James Raymond, 2003. "The IMF and Economic Development," Cambridge Books, Cambridge University Press, number 9780521816755, December.
  8. Howard White & Oliver Morrissey, 1997. "Conditionality When Donor And Recipient Preferences Vary," Journal of International Development, John Wiley & Sons, Ltd., vol. 9(4), pages 497-505.
  9. Vreeland,James Raymond, 2003. "The IMF and Economic Development," Cambridge Books, Cambridge University Press, number 9780521016957, December.
  10. Dreher, Axel, 2006. "IMF and economic growth: The effects of programs, loans, and compliance with conditionality," World Development, Elsevier, vol. 34(5), pages 769-788, May.
  11. Nichols, Albert L & Zeckhauser, Richard J, 1982. "Targeting Transfers through Restrictions on Recipients," American Economic Review, American Economic Association, vol. 72(2), pages 372-377, May.
  12. Raghuram G. Rajan, 2005. "Aid and Growth: What Does The Cross-Country Evidence Really Show?," Working Papers id:54, eSocialSciences.
  13. Julio A. Santaella, 1996. "Stylized Facts before IMF-Supported Macroeconomic Adjustment," IMF Staff Papers, Palgrave Macmillan, vol. 43(3), pages 502-544, September.
  14. Axel Dreher & Roland Vaubel, 2004. "The Causes and Consequences of IMF Conditionality," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 40(3), pages 26-54, May.
  15. Anne Krueger, 2006. "A response to Allan Meltzer," The Review of International Organizations, Springer, vol. 1(1), pages 61-64, March.
  16. Hansen, Henrik & Tarp, Finn, 2001. "Aid and growth regressions," Journal of Development Economics, Elsevier, vol. 64(2), pages 547-570, April.
  17. Bernhard Boockmann & Axel Dreher, 2002. "The Contribution of the IMF and the World Bank to Economic Freedom," International Finance 0207001, EconWPA.
  18. Zlata Hajro & Joseph Joyce, 2009. "A true test: do IMF programs hurt the poor?," Applied Economics, Taylor & Francis Journals, vol. 41(3), pages 295-306.
  19. 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.
  20. Svensson, Jakob, 1997. "When is Foreign Aid Policy Credible? - Aid Dependence and Conditionality," Seminar Papers 600, Stockholm University, Institute for International Economic Studies.
  21. S. Nuri Erbas, 2004. "IMF Conditionality and Program Ownership : A Case for Streamlined Conditionality," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 40(3), pages 10-25, May.
  22. Collier, Paul & Guillaumont, Patrick & Guillaumont, Sylviane & Gunning, Jan Willem, 1997. "Redesigning conditionality," World Development, Elsevier, vol. 25(9), pages 1399-1407, September.
  23. Prasanna Gai & Ashley Taylor, 2004. "International financial rescues and debtor country moral hazard," Money Macro and Finance (MMF) Research Group Conference 2003 34, Money Macro and Finance Research Group.
  24. Michele FRATIANNI & John PATTISON, 2007. "Who Is Runninc the IMF: Critical Shareholders or the Staff?," Working Papers 279, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  25. Dollar, David & Svensson, Jakob, 1998. "What explains the success or failure of structural adjustment programs?," Policy Research Working Paper Series 1938, The World Bank.
  26. Francisco Joséveiga, 2005. "Does IMF Support Accelerate Inflation Stabilization?," Open Economies Review, Springer, vol. 16(4), pages 321-340, October.
  27. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, EconWPA, revised 08 Jan 2004.
  28. Graham Bird & Dane Rowlands, 2004. "Financing Balance of Payments Adjustment: Options in the Light of the Elusive Catalytic Effect of IMF-Supported Programmes," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 46(3), pages 468-486, September.
  29. Axel Dreher, 2003. "The influence of elections on IMF programme interruptions," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 101-120.
  30. Todd Sandler, 2006. "Regional public goods and international organizations," The Review of International Organizations, Springer, vol. 1(1), pages 5-25, March.
  31. Morris Goldstein & Timothy F. Geithner & Paul Keating & Yung Chul Park, 2003. "IMF Structural Programs," NBER Chapters, in: Economic and Financial Crises in Emerging Market Economies, pages 363-458 National Bureau of Economic Research, Inc.
  32. C-J. Dalgaard & H. Hansen, 2001. "On Aid, Growth and Good Policies," Journal of Development Studies, Taylor & Francis Journals, vol. 37(6), pages 17-41.
  33. Richard Swedberg, 1986. "The Doctrine of Economic Neutrality of the IMF and the World Bank," Journal of Peace Research, Peace Research Institute Oslo, vol. 23(4), pages 377-390, December.
  34. 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.
  35. Drazen, Allan, 2002. "Conditionality and Ownership in IMF Lending: A Political Economy Approach," CEPR Discussion Papers 3562, C.E.P.R. Discussion Papers.
  36. Fafchamps, Marcel, 1996. "Sovereign debt, structural adjustment, and conditionality," Journal of Development Economics, Elsevier, vol. 50(2), pages 313-335, August.
  37. 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.
  38. James Vreeland, 2006. "IMF program compliance: Aggregate index versus policy specific research strategies," The Review of International Organizations, Springer, vol. 1(4), pages 359-378, December.
  39. Stone, Randall W., 2008. "The Scope of IMF Conditionality," International Organization, Cambridge University Press, vol. 62(04), pages 589-620, October.
  40. Maurizio Zanardi & Alberto Paloni, 2007. "The IMF, World Bank and policy reform," ULB Institutional Repository 2013/9823, ULB -- Universite Libre de Bruxelles.
  41. Ruben Atoyan & Patrick Conway, 2006. "Evaluating the impact of IMF programs: A comparison of matching and instrumental-variable estimators," The Review of International Organizations, Springer, vol. 1(2), pages 99-124, June.
  42. Evrensel, Ayse Y., 2002. "Effectiveness of IMF-supported stabilization programs in developing countries," Journal of International Money and Finance, Elsevier, vol. 21(5), pages 565-587, October.
  43. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-1155, December.
  44. Lancaster, Carol, 1999. "Aid Effectiveness in Africa: The Unfinished Agenda," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 8(4), pages 487-503, December.
  45. Prasanna Gai & Nicholas Vause, 2003. "Sovereign debt workouts with the IMF as delegated monitor - a common agency approach," Bank of England working papers 187, Bank of England.
  46. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
  47. Allan Drazen, 2002. "Conditionality and Ownership in IMF Lending: A Political Economy Approach," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 36-67.
  48. Wolfgang Mayer & Alex Mourmouras, 2008. "IMF conditionality: An approach based on the theory of special interest politics," The Review of International Organizations, Springer, vol. 3(2), pages 105-121, June.
  49. 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.
  50. Bruno Frey & Alois Stutzer, 2006. "Strengthening the citizens' role in international organizations," The Review of International Organizations, Springer, vol. 1(1), pages 27-43, March.
  51. Axel Dreher, 2004. "The Influence of IMF Programs on the Re-election of Debtor Governments," Economics and Politics, Wiley Blackwell, vol. 16(1), pages 53-76, 03.
  52. William Easterly & Ross Levine & David Roodman, 2004. "Aid, Policies, and Growth: Comment," American Economic Review, American Economic Association, vol. 94(3), pages 774-780, June.
  53. Allan Meltzer, 2006. "Reply to Anne Krueger," The Review of International Organizations, Springer, vol. 1(1), pages 65-67, March.
  54. Axel Dreher & Roland Vaubel, 2004. "Do IMF and IBRD Cause Moral Hazard and Political Business Cycles? Evidence from Panel Data," Open Economies Review, Springer, vol. 15(1), pages 5-22, January.
  55. Giulio Federico, 2001. "IMF Conditionality," Economics Papers 2001-W19, Economics Group, Nuffield College, University of Oxford, revised 01 Sep 2001.
  56. Svensson, Jakob, 2003. "Why conditional aid does not work and what can be done about it?," Journal of Development Economics, Elsevier, vol. 70(2), pages 381-402, April.
  57. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:141:y:2009:i:1:p:233-267. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)

or (Rebekah McClure)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.