Details
| Original language | English |
|---|---|
| Pages (from-to) | 329-358 |
| Number of pages | 30 |
| Journal | International organization |
| Volume | 66 |
| Issue number | 2 |
| Publication status | Published - Mar 2012 |
| Externally published | Yes |
Abstract
We examine whether and under what circumstances World Bank and International Monetary Fund (IMF) programs affect the likelihood of major government crises. We find that crises are, on average, more likely as a consequence of World Bank programs. We also find that governments face an increasing risk of entering a crisis when they remain under an IMF or World Bank arrangement once the economy's performance improves. The international financial institution's (IFI) scapegoat function thus seems to lose its value when the need for financial support is less urgent. While the probability of a crisis increases when a government turns to the IFIs, programs inherited by preceding governments do not affect the probability of a crisis. This is in line with two interpretations. First, the conclusion of IFI programs can signal the government's incompetence, and second, governments that inherit programs might be less likely to implement program conditions agreed to by their predecessors.
ASJC Scopus subject areas
- Social Sciences(all)
- Sociology and Political Science
- Social Sciences(all)
- Political Science and International Relations
- Business, Management and Accounting(all)
- Organizational Behavior and Human Resource Management
- Social Sciences(all)
- Law
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In: International organization, Vol. 66, No. 2, 03.2012, p. 329-358.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Do IMF and world bank programs induce government crises? An empirical analysis
AU - Dreher, Axel
AU - Gassebner, Martin
PY - 2012/3
Y1 - 2012/3
N2 - We examine whether and under what circumstances World Bank and International Monetary Fund (IMF) programs affect the likelihood of major government crises. We find that crises are, on average, more likely as a consequence of World Bank programs. We also find that governments face an increasing risk of entering a crisis when they remain under an IMF or World Bank arrangement once the economy's performance improves. The international financial institution's (IFI) scapegoat function thus seems to lose its value when the need for financial support is less urgent. While the probability of a crisis increases when a government turns to the IFIs, programs inherited by preceding governments do not affect the probability of a crisis. This is in line with two interpretations. First, the conclusion of IFI programs can signal the government's incompetence, and second, governments that inherit programs might be less likely to implement program conditions agreed to by their predecessors.
AB - We examine whether and under what circumstances World Bank and International Monetary Fund (IMF) programs affect the likelihood of major government crises. We find that crises are, on average, more likely as a consequence of World Bank programs. We also find that governments face an increasing risk of entering a crisis when they remain under an IMF or World Bank arrangement once the economy's performance improves. The international financial institution's (IFI) scapegoat function thus seems to lose its value when the need for financial support is less urgent. While the probability of a crisis increases when a government turns to the IFIs, programs inherited by preceding governments do not affect the probability of a crisis. This is in line with two interpretations. First, the conclusion of IFI programs can signal the government's incompetence, and second, governments that inherit programs might be less likely to implement program conditions agreed to by their predecessors.
UR - http://www.scopus.com/inward/record.url?scp=84860516965&partnerID=8YFLogxK
U2 - 10.1017/S0020818312000094
DO - 10.1017/S0020818312000094
M3 - Article
AN - SCOPUS:84860516965
VL - 66
SP - 329
EP - 358
JO - International organization
JF - International organization
SN - 0020-8183
IS - 2
ER -