The paper investigates fiscal developments in 112 countries during the 1990s. It finds that although the overall fiscal balance improved in most of them, the composition of this improvement differed. In countries without IMF-supported programs, revenues increased modestly and expenditure declined sharply, while in program countries both postprogram revenue and expenditure declined. In countries with programs that included fiscal structural conditions, however, the adjustment was effected primarily through sharp expenditure compression. No evidence of a statistically significant impact of IMF conditionality was found. Moreover, fiscal developments were influenced by cyclical factors and by the general stance of macroeconomic policies.
Abed, George T., Liam Ebrill, Sanjeev Gupta, Benedict Clements, Ronald McMorran, Anthony Pellechio, Jerald Schiff, and Marijn Verhoeven, 1998, Fiscal Reforms in Low-Income Countries, IMF Occasional Paper No. 160 (Washington: International Monetary Fund).
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Bird, Graham, 1996, “Borrowing from the IMF: The Policy Implications of Recent Empirical Research,” World Development, Vol. 24, No. 11, pp. 1753–60.
Bird, Graham, 2001, “IMF Programmes: Is There a Conditionality Laffer Curve?” World Economics, Vol. 2, No. 2, pp. 29–49.
Bird, Graham, and Dane Rowlands, 2002, “Do IMF Programmes Have a Catalytic Effect on Other Capital Flows?” Oxford Development Studies, Vol. 30, No. 3, pp. 229–49.
Bulíř, Aleš, and A. Javier Hamann, 2003, “Aid Volatility: An Empirical Assessment,” Staff Papers, International Monetary Fund, Vol. 50, No. 1, pp. 64–89.
Bulíř, Aleš, and Soojin Moon, 2004, “Is Fiscal Adjustment More Durable When the IMF is Involved?” Comparative Economic Studies, Vol. 46 (September), pp. 373–99.
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Conway, Patrick, 1994, “IMF Lending Programs: Participation and Impact,” Journal of Development Economics, Vol. 45 (September), pp. 365–91.
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Ghosh, Atish, Timothy Lane, Marianne Schulze-Ghattas, Aleš Bulíř, A. Javier Hamann, and Alex Mourmouras, 2002, IMF-Supported Programs in Capital Account Crises, IMF Occasional Paper No. 210 (Washington: International Monetary Fund).
Goldstein, Morris, 2000, “IMF Structural Programs,” paper prepared for National Bureau of Economic Research Conference on “Economic and Financial Crises in Emerging Market Economies,” held in Woodstock, Vermont in October.
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Guitián, Manuel, 1981, Fund Conditionality: Evolution of Principles and Practices, IMF Pamphlet Series, No. 38 (Washington: International Monetary Fund).
Gupta, Sanjeev, Benedict Clements, Emanuele Baldacci, and Carlos Mulas-Granados, 2002, “Expenditure Composition, Fiscal Adjustment, and Growth in Low-Income Countries, IMF Working Paper 02/77 (Washington: International Monetary Fund). This paper also appears, in somewhat different form, as Chapter 5 in this volume.
Hansson, Åsa, and Charles Stuart, 2003, “Peaking of Fiscal Sizes of Government,” European Journal of Political Economy, Vol. 19 (September), pp. 669–84.
International Monetary Fund (IMF), 2001, Conditionality in Fund-Supported Programs—Overview. Available on the Web at http://www.imf.org/external/np/pdr/cond/2001/eng/overview/index.htm.
Ivanova, Anna, Wolfgang Mayer, Alex Mourmouras, and George Anayiotos, 2003, “What Determines the Success or Failure of Fund-Supported Programs?” IMF Working Paper 03/8 (Washington: International Monetary Fund). This paper also appears, in somewhat different form, as Chapter 10 in this volume.
Khan, Mohsin S., 1990, “The Macroeconomic Effects of Fund-Supported Adjustment Programs,” Staff Papers, International Monetary Fund, Vol. 37 (September), pp. 195–231.
Khan, Mohsin S., and Sunil Sharma, 2001, “IMF Conditionality and Country Ownership of Programs,” IMF Working Paper 01/142 (Washington: International Monetary Fund). This paper also appears, in somewhat different form, as Chapter 7 in this volume.
Knight, Malcolm, and Julio A. Santaella, 1997, “Economic Determinants of IMF Financial Arrangements,” Journal of Development Economics, Vol. 54 (September), pp. 405–36.
Schadler, Susan, Adam Bennett, Maria Carkovic, Louis Dicks-Mireaux, Mauro Mecagni, James H.J. Morsink, and Miguel A. Savastano, 1995, IMF Conditionality: Experience Under Stand-By and Extended Arrangements, IMF Occasional Paper No. 128 (Washington: International Monetary Fund).
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