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Institutions, Program Implementation, and Macroeconomic Performance

Author

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  • Saleh M. Nsouli
  • Ruben V Atoyan
  • Alex Mourmouras

Abstract

This paper assesses empirically the links among a country's institutions and political environment, its implementation of IMF-supported programs, and macroeconomic performance in a sample of 197 programs approved between 1992 and 2002. We find that a stronger institutional and political environment is associated with better macroeconomic outcomes, especially at longer time horizons. This direct beneficial effect of institutions on macroeconomic outcomes is in addition to their indirect effect through better program implementation. We also find that program implementation exerts an independent influence on macroeconomic outcomes, especially over shorter time horizons of up to two years. Better-implemented programs are associated with lower inflation and with initially weaker but ultimately stronger external and fiscal outcomes, but with a statistically insignificant impact on economic growth.

Suggested Citation

  • Saleh M. Nsouli & Ruben V Atoyan & Alex Mourmouras, 2004. "Institutions, Program Implementation, and Macroeconomic Performance," IMF Working Papers 04/184, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:04/184
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    References listed on IDEAS

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    1. Alex Mourmouras & Anna Ivanova & George C. Anayotos & Wolfgang Mayer, 2003. "What Determines the Implementation of IMF-Supported Programs?," IMF Working Papers 03/8, International Monetary Fund.
    2. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    3. Conway, Patrick, 1994. "IMF lending programs: Participation and impact," Journal of Development Economics, Elsevier, vol. 45(2), pages 365-391, December.
    4. 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.
    5. International Monetary Fund, 1998. "Do IMF-Supported Programs Work? A Survey of the Cross-Country Empirical Evidence," IMF Working Papers 98/169, International Monetary Fund.
    6. 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.
    7. 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.
    8. Barro, Robert J. & Lee, Jong-Wha, 2005. "IMF programs: Who is chosen and what are the effects?," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1245-1269, October.
    9. F. Rozwadowski & Siddharth Tiwari & David Robinson & Susan M Schadler, 1993. "Economic Adjustment in Low-Income Countries; Experience Under the Enhanced Structural Adjustment Facility," IMF Occasional Papers 106, International Monetary Fund.
    10. Avner Greif & Lynne Kiesling & John V. C. Nye, 2015. "Introduction," Introductory Chapters,in: Institutions, Innovation, and Industrialization: Essays in Economic History and Development Princeton University Press.
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    Cited by:

    1. Judith Gold & Ruben V Atoyan & Cornelia Staritz, 2007. "Guyana; Why Has Growth Stopped? An Empirical Study on the Stagnation of Economic Growth," IMF Working Papers 07/86, International Monetary Fund.
    2. 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.

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