Do IMF-Supported Programs Catalyze Donor Assistance to Low-Income Countries?
November 12, 2014
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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.
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
Pages:
33
Volume:
2014
DOI:
Issue:
202
Series:
Working Paper No. 2014/202
Stock No:
WPIEA2014202
ISBN:
9781498381635
ISSN:
1018-5941
