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Compliance with IMF conditions and economic growth

Author

Listed:
  • Ayşe Y. Evrensel

    (Gebze Technical University, Southern Illinois University Edwardsville
    Southern Illinois University Edwardsville)

  • Taner Turan

    (Gebze Technical University, Southern Illinois University Edwardsville)

  • Halit Yanıkkaya

    (Gebze Technical University, Southern Illinois University Edwardsville)

Abstract

Using data for 110 countries and GMM estimations, we examine the effects of IMF programs on economic growth. In addition to the traditional focus on the effects of program participation, program type, and the size of IMF loans on growth, using the unique dataset MONA (Monitoring of Fund Arrangements), we add the novel angle of program compliance to the analysis by constructing compliance and noncompliance performance measures. Our empirical results indicate that IMF program participation, general conditionality, and having concessional programs do not have any significant growth effect. With respect to program compliance, compliance with fiscal balance and BOP/reserve conditions does not affect growth rates, whereas compliance with external debt, short-term debt, total domestic credit, and credit to government/public sector conditions contribute to growth. Therefore, our empirical results strongly indicate that compliance matters.

Suggested Citation

  • Ayşe Y. Evrensel & Taner Turan & Halit Yanıkkaya, 2023. "Compliance with IMF conditions and economic growth," Economic Change and Restructuring, Springer, vol. 56(6), pages 4401-4420, December.
    • Handle: RePEc:kap:ecopln:v:56:y:2023:i:6:d:10.1007_s10644-023-09557-x
    DOI: 10.1007/s10644-023-09557-x
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    More about this item

    Keywords

    IMF; Compliance; Conditionality; Growth; GMM;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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