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Do IMF programs catalyze donor assistance to low-income countries?

Author

Listed:
  • Yasemin Bal Gündüz

    (International Monetary Fund)

  • Masyita Crystallin

    (The World Bank)

Abstract

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 the 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, for gross disbursements the impact is greatest when LICs are faced with substantial macroeconomic imbalances or large shocks. Results indicate a sharp difference between the responsiveness of multilateral and bilateral donors to programs. While multilateral donors significantly raise their gross and net disbursements to program countries, the aid allocation by bilateral donors, on both a gross and net basis, does not seem to be affected by programs.

Suggested Citation

  • Yasemin Bal Gündüz & Masyita Crystallin, 2018. "Do IMF programs catalyze donor assistance to low-income countries?," The Review of International Organizations, Springer, vol. 13(3), pages 359-393, September.
    • Handle: RePEc:spr:revint:v:13:y:2018:i:3:d:10.1007_s11558-017-9280-5
    DOI: 10.1007/s11558-017-9280-5
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    More about this item

    Keywords

    IMF-supported programs; Official development assistance (ODA); Catalytic impact; Low-income countries (LICs); Propensity score matching; Aid allocation; Aid coordination; Bilateral aid; Multilateral aid;
    All these keywords.

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

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