Do IMF-Supported Programs Catalyze Donor Assistance to Low-Income Countries?
IMF Working Papers, November 12, 2014
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Bibliographic details
- Authors: Yasemin Bal Gündüz, Masyita Crystallin
- Published: November 12, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498381635.001
Objective and Methodology
- Objective: Explore whether IMF-supported programs in low-income countries (LICs) catalyze Official Development Assistance (ODA).
- Methodology: Uses a comprehensive set of ODA measures and a Propensity Score Matching approach to address selection bias.
Key Findings
- Programs that address policy or exogenous shocks have a significant catalytic impact on both the size and the modality of ODA.
- The catalytic impact is greatest when LICs are faced with substantial macroeconomic imbalances or large shocks.
- 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.
Thematic Implications
- Policy/Program Focus:
- IMF-supported programs that explicitly target policy shocks or exogenous shocks are associated with stronger donor responses.
- Donor assistance responses differ by modality: multilateral ODA appears to drive the observed catalytic effects more than bilateral ODA in matched comparisons.
- Targeting and Timing:
- The magnitude of macroeconomic imbalances or shocks influences the strength of the catalytic effect, implying timing and assessment of shock severity are important for program design and donor coordination.
Keywords and Subject Areas
- Subject: Balance of payments need, Debt Relief, Foreign aid, Foreign direct investment, Sensitivity analysis
- Keywords: balance of payments, IMF financing, IMF-supported program, ODA disbursement, WP
IMF Working Paper: Yasemin Bal Gündüz and Masyita Crystallin, November 12, 2014.