Abstract In this paper we suggest that the dual role played by the IMF, as a creditor and as a monitor of economic reforms, might explain the lack of credibility of the Fund threat of sanctioning non-compliance with conditionality. Specifically, we show that the IMF's desire to preserve its reputation as a good monitor may distort its lending decisions towards some laxity. Moreover, such distortionary incentives may be exacerbated by the length of the relationship between a country and the Fund. Estimating a dynamic panel of 53 middle-income countries, for the period 1982–2001, we find that a longer relationship does increase IMF disbursements. JEL classification: C23; D82; F34; N2 Keywords: IMF programmes; Conditionality; Incomplete information; Reputation; Dynamic panel
IMF concern for reputation and conditional lending failure: theory and empirics / S.MARCHESI; L. SABANI. - In: JOURNAL OF DEVELOPMENT ECONOMICS. - ISSN 0304-3878. - STAMPA. - 84:(2007), pp. 640-666.
IMF concern for reputation and conditional lending failure: theory and empirics
SABANI, LAURA
2007
Abstract
Abstract In this paper we suggest that the dual role played by the IMF, as a creditor and as a monitor of economic reforms, might explain the lack of credibility of the Fund threat of sanctioning non-compliance with conditionality. Specifically, we show that the IMF's desire to preserve its reputation as a good monitor may distort its lending decisions towards some laxity. Moreover, such distortionary incentives may be exacerbated by the length of the relationship between a country and the Fund. Estimating a dynamic panel of 53 middle-income countries, for the period 1982–2001, we find that a longer relationship does increase IMF disbursements. JEL classification: C23; D82; F34; N2 Keywords: IMF programmes; Conditionality; Incomplete information; Reputation; Dynamic panelFile | Dimensione | Formato | |
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