IMF concern for reputation and conditional lending failure: theory and empirics

No 114, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: In this paper we suggest that the dual role played by the IMF, as a creditor and as a monitor of economic reforms, might explain the lack of credibility of the Fund threat of sanctioning non-compliance with conditionality. Specifically, we show that the IMF desire to preserve its reputation as a good monitor may distort its lending decisions towards some laxity. Moreover, such distortionary incentives may be exacerbated by the length of the relationship between a country and the Fund. Estimating a dynamic panel of 53 middle-income countries, for the period 1982-2001, we find that a longer relationship does increase IMF disbursements.

Keywords: IMF programmes; conditionality; incomplete information; reputation; dynamic panel (search for similar items in EconPapers)
JEL-codes: C23 D82 F34 N2 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2007, Revised 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

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http://repec.dems.unimib.it/repec/pdf/mibwpaper114.pdf First version, 2007 (application/pdf)

Related works:
Journal Article: IMF concern for reputation and conditional lending failure: Theory and empirics (2007)
Working Paper: IMF Concern for Reputation and Conditional Lending Failure: Theory and Empirics (2005)
Working Paper: IMF concern for reputation and conditional lending failure: theory and empirics (2005)
Working Paper: IMF concern for reputation and conditional lending failure: theory and empirics (2005)
Working Paper: IMF concern for reputation and conditional lending failure: theory and empirics (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:114

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