Download This PaperIMF Conditionality and the Intertemporal Allocation of Resources
International Review of Finance 14(2), pp. 203-235, 2014
33 Pages Posted: 16 Aug 2004 Last revised: 9 Aug 2014
Date Written: February 3, 2014
Abstract
This article analyses the impact of IMF conditionality on the intertemporal allocation of resources in an emerging market economy. The study identifies a principal agent problem between the government of the emerging market and its citizens and shows that conditionality has the potential to mitigate the resulting misallocation of resources. Nevertheless, the analysis indicates that if IMF lending were influenced by geopolitical motives then the suboptimal allocation of resources will remain notwithstanding IMF conditionality.
Keywords: Conditionality, IMF, Intertemporal Resource Allocation
JEL Classification: D91, F33, F34
Suggested Citation: Suggested Citation
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