The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
This paper analyzes the initial conditions before Fund financial arrangements are adopted. Evidence from 324 Fund arrangements in 78 developing countries during 1973-91 indicates that there are important differences in the characteristics between program episodes and a control group. Program episodes exhibit weaker balance of payments, output growth, investment, external conditions and fiscal policy than the control group; they are also characterized by a higher degree of external indebtedness and inflation, and their exchange rates are more depreciated in both nominal and real terms. Only in the case of the growth rates of money and credit do the two groups appear to be statistically similar.