IMF lending arrangements in emerging and developing countries - participation and prediction

The literature on determinants of International Monetary Fund (IMF) interventions in emerging and developing countries shows that the IMF's decisions are determined by political and economic causes. This article empirically investigates economic factors, showing that a country's probabilit...

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Bibliographic Details
Published in:Economic research - Ekonomska istraživanja 2016-01, Vol.29 (1), p.446-458
Main Authors: Orăștean, Ramona, Mărginean, Silvia, Opreana, Claudiu
Format: Article
Language:English
Subjects:
Developing countries
Discriminant analysis
Economic development
Economic factors
Economic theory
emerging and developing countries
IMF lending arrangements
International lending
LDCs
Loans
participation
prediction
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Summary:The literature on determinants of International Monetary Fund (IMF) interventions in emerging and developing countries shows that the IMF's decisions are determined by political and economic causes. This article empirically investigates economic factors, showing that a country's probability to sign an IMF arrangement can be predicted by looking at a core group of macroeconomic variables. Using discriminant analysis we develop a score function that allows us to predict a country's future participation in IMF programmes. The study covers 153 emerging and developing countries, over more than 30 years (1980-2011) and 654 agreements, for both non-concessional and concessional loans. The proposed tools are simple, consistent and relevant and they can be used both to monitor an IMF country and its economic development in real time and to forecast future demand for IMF aid.
ISSN:1331-677X
1848-9664
DOI:10.1080/1331677X.2016.1174389