Does the IMF cause moral hazard and political business cycles? : Evidence from panel data


Dreher, Axel ; Vaubel, Roland


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URL: https://ub-madoc.bib.uni-mannheim.de/1013
URN: urn:nbn:de:bsz:180-madoc-10131
Document Type: Working paper
Year of publication: 2000
The title of a journal, publication series: Discussion Papers / Institut für Volkswirtschaftslehre und Statistik ; Department of Economics, Universität Mannheim
Volume: 598
Place of publication: Mannheim
Publication language: English
Institution: School of Law and Economics > Sonstige - Fakultät für Rechtswissenschaft und Volkswirtschaftslehre
MADOC publication series: Institut für Volkswirtschaftslehre und Statistik > Discussion Papers
Subject: 330 Economics
Classification: JEL: F34 F33 D72 ,
Subject headings (SWD): Internationaler Währungsfonds , Geldpolitik , Finanzpolitik
Abstract: Using panel data for 106 countries in 1971-1997, we estimate generalized least squares regressions to explain IMF lending as well as monetary and fiscal policies in the recipient countries. With respect to moral hazard, we find that a country's rate of monetary expansion and its government budget deficit is higher the less it has exhausted its borrowing potential in the Fund and the more credit it has received from the Fund. As for political business cycles, our evidence indicates that, even with a considerable number of control variables, IMF credits in the more democratic recipient countries are larger in pre-election and post-election years. Thus, IMF lending seems to facilitate the generation of political business cycles, while IMF conditionality may serve as a scapegoat for unpopular corrective measures after the election. The paper concludes with implications for IMF reform.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Dreher, Axel ; Vaubel, Roland (2000) Does the IMF cause moral hazard and political business cycles? : Evidence from panel data. Open Access Discussion Papers / Institut für Volkswirtschaftslehre und Statistik ; Department of Economics, Universität Mannheim Mannheim 598 [Working paper]
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