The Effect of IMF Programs on Economic Growth

Posted: 26 Oct 2000

See all articles by Adam Przeworski

Adam Przeworski

New York University (NYU) - Wilf Family Department of Politics

James Raymond Vreeland

Yale University - Department of Political Science

Abstract

Using a bivariate, dynamic version of the Heckman selection model, we estimate the effect of participation in International Monetary Fund (IMF) programs on economic growth. We find evidence that governments enter into agreements with the IMF under the pressures of a foreign reserves crisis but they also bring in the Fund to shield themselves from the political costs of adjustment policies. Program participation lowers growth rates for as long as countries remain under a program. Once countries leave the program, they grow faster than if they had remained, but not faster than they would have without participation.

Keywords: Economic growth, IMF, Selection

JEL Classification: C1, O4

Suggested Citation

Przeworski, Adam and Vreeland, James Raymond, The Effect of IMF Programs on Economic Growth. Journal of Development Economics, Vol. 62, No 2, 2000 . Available at SSRN: https://ssrn.com/abstract=243976

Adam Przeworski

New York University (NYU) - Wilf Family Department of Politics ( email )

715 Broadway
New York, NY 10003
United States
(212) 998-3707 (Phone)
(212) 995-4184 (Fax)

HOME PAGE: http://www.nyu.edu/gsas/dept/politics/faculty/przeworski/przeworski_home.html

James Raymond Vreeland (Contact Author)

Yale University - Department of Political Science ( email )

Box 208269
New Haven, DC 06520-8269
United States
203-432 6196 (Phone)
203-432 6196 (Fax)

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