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Revisiting the Effects of IMF Programs on Poverty and Inequality

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  • Doris A. Oberdabernig

    () (Department of Economics, Vienna University of Economics and Business)

Abstract

Investigating how lending programs of the International Monetary Fund (IMF) affect poverty and inequality, we explicitly address model uncertainty. We control for endogenous selection into IMF programs using data on 86 low- and middle income countries for the 1982-2009 period and analyze program effects on various poverty and inequality measures. The results rely on averaging over 90 specifications of treatment effect models and indicate adverse short-run effects of IMF agreements on poverty and inequality for the whole sample, while for a 2000-2009 subsample the results are reversed. There is evidence that significant short-run effects might disappear in the long-run.

Suggested Citation

  • 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.
  • Handle: RePEc:wiw:wiwwuw:wuwp144
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    References listed on IDEAS

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    1. Vreeland,James Raymond, 2003. "The IMF and Economic Development," Cambridge Books, Cambridge University Press, number 9780521816755, May.
    2. Morduch, Jonathan, 1994. "Poverty and Vulnerability," American Economic Review, American Economic Association, vol. 84(2), pages 221-225, May.
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    6. Conway, Patrick, 1994. "IMF lending programs: Participation and impact," Journal of Development Economics, Elsevier, vol. 45(2), pages 365-391, December.
    7. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    8. Kenny, Charles & Williams, David, 2001. "What Do We Know About Economic Growth? Or, Why Don't We Know Very Much?," World Development, Elsevier, vol. 29(1), pages 1-22, January.
    9. 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.
    10. Wood, Adrian & Ridao-Cano, Cristobal, 1999. "Skill, Trade, and International Inequality," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 89-119, January.
    11. Sen, Amartya, 1979. " Issues in the Measurement of Poverty," Scandinavian Journal of Economics, Wiley Blackwell, vol. 81(2), pages 285-307.
    12. Easterly, William, 2001. "The effect of International Monetary Fund and World Bank programs on poverty," Policy Research Working Paper Series 2517, The World Bank.
    13. Mattias Lundberg & Lyn Squire, 2003. "The simultaneous evolution of growth and inequality," Economic Journal, Royal Economic Society, vol. 113(487), pages 326-344, April.
    14. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    15. Collier, Paul & Gunning, Jan Willem, 1999. "The IMF's Role in Structural Adjustment," Economic Journal, Royal Economic Society, vol. 109(459), pages F634-51, November.
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    Citations

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    Cited by:

    1. Doris A. Oberdabernig, 2018. "Determinants of IMF lending: How different is Sub-Saharan Africa?," Economics Bulletin, AccessEcon, vol. 38(1), pages 136-145.
    2. Stubbs, Thomas & Kentikelenis, Alexander & Stuckler, David & McKee, Martin & King, Lawrence, 2017. "The impact of IMF conditionality on government health expenditure: A cross-national analysis of 16 West African nations," Social Science & Medicine, Elsevier, vol. 174(C), pages 220-227.
    3. repec:ers:ijebaa:v:iv:y:2016:i:2:p:80-92 is not listed on IDEAS
    4. Bal Gündüz, Yasemin, 2016. "The Economic Impact of Short-term IMF Engagement in Low-Income Countries," World Development, Elsevier, vol. 87(C), pages 30-49.
    5. repec:aka:aoecon:v:67:y:2017:i:3:p:311-332 is not listed on IDEAS
    6. Axel Dreher & Katharina Michaelowa, 2008. "The political economy of international organizations," The Review of International Organizations, Springer, vol. 3(4), pages 331-334, December.
    7. repec:spr:revint:v:12:y:2017:i:4:d:10.1007_s11558-016-9250-3 is not listed on IDEAS
    8. Christian Mumssen & Yasemin Bal Gunduz & Christian H Ebeke & Linda Kaltani, 2013. "IMF-Supported Programs in Low Income Countries; Economic Impact over the Short and Longer Term," IMF Working Papers 13/273, International Monetary Fund.
    9. Lang, Valentin, 2016. "The Economics of the Democratic Deficit: The Effect of IMF Programs on Inequality," Working Papers 0617, University of Heidelberg, Department of Economics.
    10. Hadi Esfahani & Seyed Karimi, 2014. "The Distributional Consequences of Economic Growth and Public Spending Programs in Iran," Working Papers 891, Economic Research Forum, revised Dec 2014.
    11. repec:rom:rampas:v:2016:y:2016:i:26:p:25-48 is not listed on IDEAS
    12. repec:eee:socmed:v:187:y:2017:i:c:p:296-305 is not listed on IDEAS

    More about this item

    Keywords

    Poverty and income distribution; IMF lending programs; model uncertainty; treatment effects; cross-country analysis; developing countries;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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