How to evaluate the effects of IMF conditionality

The Review of International Organizations - Tập 15 - Trang 29-73 - 2018
Thomas Stubbs1,2, Bernhard Reinsberg2,3, Alexander Kentikelenis4, Lawrence King5
1Department of Politics and International Relations, Royal Holloway, University of London, London, UK
2Centre for Business Research, University of Cambridge, Cambridge, UK
3School of Social and Political Sciences, University of Glasgow, Glasgow, UK
4Department of Social and Political Sciences, Bocconi University, Milan, Italy
5Department of Economics, University of Massachusetts Amherst, Amherst, USA

Tóm tắt

Following calls for a more disaggregated approach to studying the consequences of IMF programs, scholars have developed new datasets of IMF-mandated policy reforms, or ‘conditionality.’ Initial studies have explored how conditions have, inter alia, affected tax revenues, public sector wages, and health systems. Notwithstanding the important contributions of these studies, a methodological quandary arises as to how to quantitatively examine the effects of conditionality, as distinct from other aspects of IMF operations (e.g., credit, technical support, or aid and investment catalysis). In this article, we review and advance these methodological debates by developing an identification strategy for addressing the multiple endogenous components of IMF programs. We begin by surveying the main strategies for studying the effects of IMF programs: matching methods, instrumental variable approaches, system GMM estimation, and variants of Heckman estimators. We then adapt these methods for studying the effects of conditionality per se. Specifically, we utilize a compound instrumental variable design over a system of three equations to address sources of endogeneity related to, first, the IMF participation decision and, second, the conditions included within the program. In Monte Carlo simulations, we demonstrate that our approach is unbiased and performs better than alternatives on standard diagnostics across a range of scenarios. Finally, we apply these methods to investigate how IMF programs impact government education spending as a share of GDP on a sample of 132 developing countries for the period 1990 to 2014, finding exposure to an additional condition results in a 0.05 percentage point decline.

Tài liệu tham khảo

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