Structural Reforms, IMF Programs and Capacity Building: An Empirical Investigation

IMF Working Papers, September 21, 2012

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Canonical URL: Structural Reforms, IMF Programs and Capacity Building: An Empirical Investigation

Paper investigates the role that International Monetary Fund (IMF) programs and capacity building play in fostering structural reforms.
Uses two novel datasets on IMF capacity building and structural reforms available for over one hundred IMF member countries over the period 1980 - 2010.
Main results summarized below.

There is a general association between IMF programs and structural reforms but this relationship is not very robust.
IMF training leads to an increase in structural reforms but only:
- through IMF programs, and
- only when a significant share of public servants is trained.
IMF technical assistance does not significantly lead to more structural reforms but raises the likelihood of completion of ongoing IMF programs.
Results are robust to a large number of checks, estimators and correcting for endogeneity.

Coverage: over one hundred IMF member countries.
Time period: 1980 - 2010.
Datasets: two novel datasets on IMF capacity building and structural reforms (as described in the paper).

Authors report robustness to:
- a large number of checks,
- alternative estimators,
- corrections for endogeneity.

Subject: Balance of payments, Capital account, Current account, Econometric analysis, Estimation techniques, Macrostructural analysis, Structural reforms
Keywords: Capacity Building, Capital account, Central and Eastern Europe, Current account, East Asia, Estimation techniques, IMF member country, IMF program, IMF program conditionality, IMF staff, IMF training, Structural Reform, Structural reforms, Sub-Saharan Africa, WP, yes

Source: IMF Working Paper "Structural Reforms, IMF Programs and Capacity Building: An Empirical Investigation" (Working Paper No. 2012/232).