Do IMF-Supported Programs Catalyze Donor Assistance to Low-Income Countries?

Author/Editor:

Yasemin Bal Gunduz ; Masyita Crystallin

Publication Date:

November 12, 2014

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This study explores whether IMF-supported programs in low-income countries (LICs) catalyze Official Development Assistance (ODA). Based on a comprehensive set of ODA measures and using Propensity Score Matching approach to address selection bias, we show that programs addressing policy or exogenous shocks have a significant catalytic impact on both the size and the modality of ODA. Moreover, the impact is greatest when LICs are faced with substantial macroeconomic imbalances or large shocks. Nevertheless, when countries attracting similar donor assistance before shocks are matched results for bilateral ODA turn insignificant, suggesting that the catalytic impact is attributed primarily to multilateral ODA.

Series:

Working Paper No. 2014/202

Subject:

Balance of payments need Debt relief Foreign aid Foreign direct investment Sensitivity analysis

English

Publication Date:

November 12, 2014

ISBN/ISSN:

9781498381635/1018-5941

Stock No:

WPIEA2014202

Pages:

33

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