IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/5601.html
   My bibliography  Save this paper

The Political Economy Of International Financial Institutions’ Lending To Pakistan

Author

Listed:
  • Anwar, Mumtaz

Abstract

This paper analyzes the determinants of multilateral aid from international financial institutions (IFIs) to Pakistan, focusing on the world three major IFIs, the World Bank, the IMF and the ADB. Political economic factors, notably bureaucratic interests and major shareholders economic interests, are suspected to be relevant in international aid allocation decisions. Pooled Tobit estimation analyses confirm this hypothesis. Although recipient need also proves to be a relevant determinant of lending, bureaucratic interest outranks the former. Among the main multilateral donors, the IDA and the ADB are shown to be more bureaucratic and stakeholders economic interest-oriented in their lending decisions than the IBRD and the IMF, which tend to adhere to official lending explanations.

Suggested Citation

  • Anwar, Mumtaz, 2006. "The Political Economy Of International Financial Institutions’ Lending To Pakistan," MPRA Paper 5601, University Library of Munich, Germany, revised 01 Dec 2006.
    • Handle: RePEc:pra:mprapa:5601
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/5601/1/MPRA_paper_5601.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert K. Fleck & Christopher Kilby, 2006. "World Bank Independence: A Model and Statistical Analysis of US Influence," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 224-240, May.
    2. Thomas Barnebeck Andersen & Henrik Hansen & Thomas Markussen, 2006. "US politics and World Bank IDA-lending," Journal of Development Studies, Taylor & Francis Journals, vol. 42(5), pages 772-794.
    3. Leland B. Yeager, 2000. "Exchange Rates between What Sorts of Currencies?," Cato Journal, Cato Journal, Cato Institute, vol. 20(1), Spring/Su.
    4. Graham Bird & Dane Rowlands, 2001. "IMF lending: how is it affected by economic, political and institutional factors?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 4(3), pages 243-270.
    5. William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
    6. Cline, William R. & Sargen, Nicholas P., 1975. "Performance criteria and multilateral aid allocation," World Development, Elsevier, vol. 3(6), pages 383-391, June.
    7. Jean‐Claude Berthélemy, 2006. "Bilateral Donors’ Interest vs. Recipients’ Development Motives in Aid Allocation: Do All Donors Behave the Same?," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 179-194, May.
    8. William Greene, 2004. "Fixed Effects and Bias Due to the Incidental Parameters Problem in the Tobit Model," Econometric Reviews, Taylor & Francis Journals, vol. 23(2), pages 125-147.
    9. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    10. Harrigan, Jane & Wang, Chengang & El-Said, Hamed, 2006. "The economic and political determinants of IMF and world bank lending in the Middle East and North Africa," World Development, Elsevier, vol. 34(2), pages 247-270, February.
    11. Mueller,Dennis C. (ed.), 1997. "Perspectives on Public Choice," Cambridge Books, Cambridge University Press, number 9780521553773, January.
    12. Axel Dreher, 2004. "A Public Choice Perspective of IMF and World Bank Lending and Conditionality," Public Choice, Springer, vol. 119(3_4), pages 445-464, June.
    13. Gang, Ira N. & Lehman, James A., 1990. "New directions or not: USAID in Latin America," World Development, Elsevier, vol. 18(5), pages 723-732, May.
    14. Axel Dreher & Nathan Jensen, 2003. "Independent Actor or Agent? An Empirical Analysis of the impact of US interests on IMF Conditions," International Finance 0310004, University Library of Munich, Germany, revised 08 Jan 2004.
    15. Barro, Robert J. & Lee, Jong-Wha, 2005. "IMF programs: Who is chosen and what are the effects?," Journal of Monetary Economics, Elsevier, vol. 52(7), pages 1245-1269, October.
    16. Michaelowa, Katharina, 2003. "The Political Economy of the Enhanced HIPC-Initiative," Public Choice, Springer, vol. 114(3-4), pages 461-476, March.
    17. Nancy Birdsall & Stijn Claessens & Ishac Diwan, 2003. "Policy Selectivity Forgone: Debt and Donor Behavior in Africa," The World Bank Economic Review, World Bank, vol. 17(3), pages 409-435, December.
    18. Frey, Bruno S. & Schneider, Friedrich, 1986. "Competing models of international lending activity," Journal of Development Economics, Elsevier, vol. 20(2), pages 225-245, March.
    19. Thomas D. Willett, 2001. "Upping the Ante for Political Economy Analysis of the International Financial Institutions," The World Economy, Wiley Blackwell, vol. 24(3), pages 317-332, March.
    20. William A. Niskanen, 1994. "Bureaucracy And Public Economics," Books, Edward Elgar Publishing, number 333.
    21. Kilby, Christopher, 2005. "Donor Influence in MDBs: the Case of the Asian Development Bank," Vassar College Department of Economics Working Paper Series 70, Vassar College Department of Economics.
    22. Berthelemy, Jean-Claude & Tichit, Ariane, 2004. "Bilateral donors' aid allocation decisions--a three-dimensional panel analysis," International Review of Economics & Finance, Elsevier, vol. 13(3), pages 253-274.
    23. Stone, Randall W., 2004. "The Political Economy of IMF Lending in Africa," American Political Science Review, Cambridge University Press, vol. 98(4), pages 577-591, November.
    24. Andersen, Thomas Barnebeck & Harr, Thomas & Tarp, Finn, 2006. "On US politics and IMF lending," European Economic Review, Elsevier, vol. 50(7), pages 1843-1862, October.
    25. Trumbull, William N & Wall, Howard J, 1994. "Estimating Aid-Allocation Criteria with Panel Data," Economic Journal, Royal Economic Society, vol. 104(425), pages 876-882, July.
    26. repec:cto:journl:v:20:y:2000:i:1:p:85-103 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Farwa Sial & Juvaria Jafri & Abdul Khaliq, 2023. "Pakistan, China and the Structures of Debt Distress: Resisting Bretton Woods," Development and Change, International Institute of Social Studies, vol. 54(5), pages 1226-1263, September.
    2. Christopher Kilby, 2011. "Informal influence in the Asian Development Bank," The Review of International Organizations, Springer, vol. 6(3), pages 223-257, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert K. Fleck & Christopher Kilby, 2006. "World Bank Independence: A Model and Statistical Analysis of US Influence," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 224-240, May.
    2. Axel Dreher & Jan-Egbert Sturm, 2012. "Do the IMF and the World Bank influence voting in the UN General Assembly?," Public Choice, Springer, vol. 151(1), pages 363-397, April.
    3. Axel Dreher & Peter Nunnenkamp & Rainer Thiele, 2008. "Does US aid buy UN general assembly votes? A disaggregated analysis," Public Choice, Springer, vol. 136(1), pages 139-164, July.
    4. Axel Dreher & Jan-Egbert Sturm & James Raymond Vreeland, 2006. "Does Membership on the UN Security Council Influence IMF Decisions? Evidence from Panel Data," CESifo Working Paper Series 1808, CESifo.
    5. Kilby, Christopher, 2009. "The political economy of conditionality: An empirical analysis of World Bank loan disbursements," Journal of Development Economics, Elsevier, vol. 89(1), pages 51-61, May.
    6. Kilby, Christopher, "undated". "The Political Economy of Conditionality: An Empirical Analysis of World Bank Enforcement," Vassar College Department of Economics Working Paper Series 92, Vassar College Department of Economics.
    7. Christopher Kilby, 2006. "Donor influence in multilateral development banks: The case of the Asian Development Bank," The Review of International Organizations, Springer, vol. 1(2), pages 173-195, June.
    8. Rainer Thiele & Peter Nunnenkamp & Axel Dreher, 2007. "Do Donors Target Aid in Line with the Millennium Development Goals? A Sector Perspective of Aid Allocation," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 596-630, December.
    9. Lauren L. Ferry & Emilie M. Hafner-Burton & Christina J. Schneider, 2020. "Catch me if you care: International development organizations and national corruption," The Review of International Organizations, Springer, vol. 15(4), pages 767-792, October.
    10. Morrison Kevin M, 2011. "As the World Bank Turns: Determinants of IDA Lending in the Cold War and After," Business and Politics, De Gruyter, vol. 13(2), pages 1-29, August.
    11. Thiele, Rainer & Nunnenkamp, Peter & Dreher, Axel, 2006. "Sectoral aid priorities: Are donors really doing their best to achieve the millennium development goals?," Kiel Working Papers 1266, Kiel Institute for the World Economy (IfW Kiel).
    12. Robert K. Fleck & Christopher Kilby, 2006. "How Do Political Changes Influence US Bilateral Aid Allocations? Evidence from Panel Data," Review of Development Economics, Wiley Blackwell, vol. 10(2), pages 210-223, May.
    13. Kersting, Erasmus K. & Kilby, Christopher, 2016. "With a little help from my friends: Global electioneering and World Bank lending," Journal of Development Economics, Elsevier, vol. 121(C), pages 153-165.
    14. Breßlein, Martin & Schmaljohann, Maya, 2013. "Surrender your market! Do the G5 countries use World Bank Trade Conditionality to promote Trade?," Working Papers 0550, University of Heidelberg, Department of Economics.
    15. Dreher, Axel & Sturm, Jan-Egbert & Vreeland, James Raymond, 2009. "Global horse trading: IMF loans for votes in the United Nations Security Council," European Economic Review, Elsevier, vol. 53(7), pages 742-757, October.
    16. Harrigan, Jane & Wang, Chengang, 2011. "A New Approach to the Allocation of Aid Among Developing Countries: Is the USA Different from the Rest?," World Development, Elsevier, vol. 39(8), pages 1281-1293, August.
    17. Christopher Kilby, 2011. "Informal influence in the Asian Development Bank," The Review of International Organizations, Springer, vol. 6(3), pages 223-257, September.
    18. Ruxanda Berlinschi, 2010. "Reputation concerns in aid conditionality," The Review of International Organizations, Springer, vol. 5(4), pages 433-459, December.
    19. Christopher Kilby, 2009. "Donor influence in international financial institutions: Deciphering what alignment measures measure," Villanova School of Business Department of Economics and Statistics Working Paper Series 8, Villanova School of Business Department of Economics and Statistics.
    20. Kilby, Christopher, 2013. "The political economy of project preparation: An empirical analysis of World Bank projects," Journal of Development Economics, Elsevier, vol. 105(C), pages 211-225.

    More about this item

    Keywords

    Foreign aid; International organizations; Bureaucracy;
    All these keywords.

    JEL classification:

    • F35 - International Economics - - International Finance - - - Foreign Aid
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:5601. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.