Chapter 3 Do IMF-Supported Programs Boost Private Capital Inflows? The Role of Program Size and Policy Adjustment
Author: Roberto Benelli1
  • 1 0000000404811396https://isni.org/isni/0000000404811396International Monetary Fund
Language:
English
Keywords:
SEM; IMF program; country; IMF-supported program; program implementation; IMF effort; current account ratio; Current account; Capital flows; Private capital flows; Fiscal stance; Global; Sub-Saharan Africa; East Asia; Africa; Europe; program access; IMF arrangement; confidence level; IMF's staff; structural adjustment; Inflation; Fiscal consolidation; Capital inflows

Abstract

I analyze empirically whether program size (the size of financial assistance) and policy adjustment matter for the success of IMF-supported programs. I define a program as successful in boosting private capital flows if the initial program projections for net private capital flows are met or exceeded. I find that success is negatively associated with the size of financial assistance, especially in countries with market access, and that projection biases arising from binding constraints on the amount of IMF lending may account for this association. Moreover, policy adjustment seems to have a causal positive effect on the likelihood of program success.

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Cover IMF-Supported Programs
IMF-Supported Programs
Recent Staff Research
Author: Mr. Alessandro Rebucci and Mr. Ashoka Mody
ISBN:
9781589063617
Publication Date:
03 Apr 2006
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589063617.072
Pages:
292