The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded

MoFiR Working Paper No. 35

27 Pages Posted: 24 Feb 2010 Last revised: 1 Mar 2010

See all articles by Andrea Filippo Presbitero

Andrea Filippo Presbitero

Università Politecnica delle Marche - Department of Economics; Centre for Macroeconomics & Finance Research (CeMaFiR)

Alberto Zazzaro

Università Politecnica delle Marche - Faculty of Economics

Date Written: February 23, 2010

Abstract

Developing countries are the least to blame for the outbreak of the financial crisis, but they are destined to suffer the most dramatic and long-lasting consequences. This chapter focuses on the early responses of the International Monetary Fund to the present crisis in low- and middle-income countries. The IMF lending policy has been harshly criticized for being sensitive not only to the fundamental imbalances in the economic conditions of borrowing countries, but also to their lobbying capacity and to political-economy interests of the IMF's major shareholders, i.e., the USA and G-7 countries, which dominate the decision-making process and the Fund's view of good economic policies. Preliminary analysis of the 2008 and 2009 IMF arrangements shows that, notwithstanding the recent changes in the lending framework and the severity of the global crisis, the Fund's credit allocation is still mainly driven by the strategic interests of Western countries, instead of the macroeconomic conditions of recipients.

Keywords: Global crisis, IMF programs, Washington Consensus, growth

JEL Classification: F33, F34, F35, O11

Suggested Citation

Presbitero, Andrea Filippo and Zazzaro, Alberto, The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded (February 23, 2010). MoFiR Working Paper No. 35. Available at SSRN: https://ssrn.com/abstract=1557707 or http://dx.doi.org/10.2139/ssrn.1557707

Andrea Filippo Presbitero (Contact Author)

Università Politecnica delle Marche - Department of Economics ( email )

Piazzale Martelli, 8
Ancona, AN 60121
Italy
+39 0712207074 (Phone)

HOME PAGE: http://sites.google.com/site/presbitero/

Centre for Macroeconomics & Finance Research (CeMaFiR) ( email )

Piazza Mirabello, 2
Milan, 20100
Italy

Alberto Zazzaro

Università Politecnica delle Marche - Faculty of Economics ( email )

Piazzale Martelli, 8
60121 Ancona
Italy

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