{
  "title": "The Incidence and Effectiveness of Prior Actions in IMF-supported Programs",
  "publication": "IMF Working Papers, September 1, 2006",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/the-incidence-and-effectiveness-of-prior-actions-in-imf-supported-programs-19524",
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  "summary": "Prior actions are measures that need to be implemented prior to Board approval of an IMFsupported program. This paper examines whether such prior actions can signal a willingness to implement reforms, especially when the member's track record is weak.",
  "sections": [
    {
      "heading": "Purpose and scope",
      "content": "- Prior actions are measures that need to be implemented prior to Board approval of an IMF-supported program.\n- The paper examines whether prior actions can signal a willingness to implement reforms, especially when the member's track record is weak.\n- Focus includes programs supported by the General Resources Account (GRA) and assessment of signaling, screening, macroeconomic target strengthening, and medium-term growth effects."
    },
    {
      "heading": "Main findings",
      "content": "- There is some support for a signaling role of prior actions, particularly for programs supported by the General Resources Account (GRA).\n- Controlling for the member's previous track record, prior actions are associated with greater compliance with other structural conditions, suggesting possible use as a screening device.\n- Prior actions set at program approval serve as a useful screening device and strengthen the macroeconomic targets set out in the IMF-supported program.\n- The growth impact analysis shows a demonstrable screening effect on growth over the medium term:\n  - The growth impact of the ratio of prior actions at the outset versus the rest of the program is significantly positive.\n  - The total number of prior actions is not statistically significant for growth."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Prior actions can be used to screen program applicants and identify governments more likely to comply with program conditions.\n- Setting prior actions at program approval may strengthen credibility of macroeconomic targets in IMF-supported programs.\n- Emphasis on the ratio of front-loaded prior actions (at the outset) as a relevant metric for medium-term growth outcomes, rather than the total count of prior actions."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subjects: Budget planning and preparation; Fiscal stance; Inflation; Public expenditure review; Real exchange rates\n- Keywords: government; IMF effort; IMF's program conditionality; program; program implementation; WP\n\n---\n\n Content in this bundle\n\n- wp06213\n  - wp06213 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp06213 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/the-incidence-and-effectiveness-of-prior-actions-in-imf-supported-programs-19524"
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    "[Markdown version](/en/publications/wp/issues/2016/12/31/the-incidence-and-effectiveness-of-prior-actions-in-imf-supported-programs-19524/index.md)",
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    "Authors: Uma Ramakrishnan, Alun H. Thomas",
    "Published: September 1, 2006",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451864731.001",
    "Prior actions are measures that need to be implemented prior to Board approval of an IMF-supported program.",
    "The paper examines whether prior actions can signal a willingness to implement reforms, especially when the member's track record is weak.",
    "Focus includes programs supported by the General Resources Account (GRA) and assessment of signaling, screening, macroeconomic target strengthening, and medium-term growth effects.",
    "There is some support for a signaling role of prior actions, particularly for programs supported by the General Resources Account (GRA).",
    "Controlling for the member's previous track record, prior actions are associated with greater compliance with other structural conditions, suggesting possible use as a screening device.",
    "Prior actions set at program approval serve as a useful screening device and strengthen the macroeconomic targets set out in the IMF-supported program.",
    "The growth impact analysis shows a demonstrable screening effect on growth over the medium term:",
    "Prior actions can be used to screen program applicants and identify governments more likely to comply with program conditions.",
    "Setting prior actions at program approval may strengthen credibility of macroeconomic targets in IMF-supported programs.",
    "Emphasis on the ratio of front-loaded prior actions (at the outset) as a relevant metric for medium-term growth outcomes, rather than the total count of prior actions.",
    "Subjects: Budget planning and preparation; Fiscal stance; Inflation; Public expenditure review; Real exchange rates",
    "Keywords: government; IMF effort; IMF's program conditionality; program; program implementation; WP",
    "**_wp06213**"
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