Once Bitten: New Evidence on the Link between IMF Conditionality and IMF Stigma

63 Pages Posted: 17 Apr 2019

See all articles by Irina Andone

Irina Andone

National Institute of Economic Research

Beatrice Scheubel

European Central Bank (ECB); Ludwig Maximilian University of Munich (LMU) - Center for Economic Studies (CES)

Date Written: April 12, 2019

Abstract

While the consequences and effectiveness of IMF conditionality have long been the focus of research, the possible negative impact of IMF conditionality on countries’ willingness to ask for an IMF programme – often termed ‘IMF stigma’ – has recently received attention particularly from policy circles. In this paper we investigate how countries’ past experience with the IMF and their peers’ experience with the IMF affect their likelihood of entering a subsequent IMF arrangement. Our results indicate that, even when controlling for the success of past programmes, a country is less likely to approach the IMF for help if in the past it experienced an aboveaverage number of disbursement-relevant conditions. We find hardly any impact of peers’ experience, except for Asian countries.

Keywords: Financial arrangements, reserves, IMF MONA, crisis resolution

JEL Classification: F33, F53, F55, H87

Suggested Citation

Andone, Irina and Scheubel, Beatrice, Once Bitten: New Evidence on the Link between IMF Conditionality and IMF Stigma (April 12, 2019). ECB Working Paper No. 2262. Available at SSRN: https://ssrn.com/abstract=3372048

Irina Andone (Contact Author)

National Institute of Economic Research ( email )

Box 3116
Stockholm, 10362
Sweden

Beatrice Scheubel

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Ludwig Maximilian University of Munich (LMU) - Center for Economic Studies (CES)

Schackstr. 4
Munich, 80539
Germany

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