Do IMF-Supported Programs Boost Private Capital Inflows? the Role of Program Size and Policy Adjustment

Author/Editor:

Roberto Benelli

Publication Date:

November 1, 2003

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:

I analyze empirically whether program size (the size of financial assistance) and policy adjustment matter for the success of IMF-supported programs. I define a program as successful if the initial program projections for net private capital flows are met or exceeded. I find that success is negatively associated with the size of financial assistance, especially in countries with market access, and that projection biases binding constraints on the amount of IMF lending may account for this association. Moreover, policy adjustment seems to have a causal positive effect on the likelihood of program success.

Series:

Working Paper No. 2003/231

Subject:

Balance of payments Capital flows Capital inflows Fiscal consolidation Fiscal policy Inflation Prices Private capital flows

English

Publication Date:

November 1, 2003

ISBN/ISSN:

9781451875553/1018-5941

Stock No:

WPIEA2312003

Pages:

35

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