Abstract

Thailand received financial assistance from the IMF following its severe economic and financial crisis, with the belief that strict adherence to the IMF advice would eventually steer the country out of the crisis. The IMF gave Thailand technical advice and financial assistance in good faith, with the aim of bringing about a sustained recovery. The extent of the crisis was unexpectedly severe, however, and the international financial market grew turbulent following the swift diffusion of Thailand’s crisis to other countries. Investors thus became risk averse and engaged in a flight to quality.