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Macro performance under adjustment lending

Author

Listed:
  • Faini, Riccardo
  • De Melo, Jaime
  • Senhadji-Semlali, Abdel
  • Stanton, Julie
Abstract
The authors of this paper use simple statistical methods to measure the effect of adjustment lending (AL) on economic performance. Using eight economic indicators, they rely on traditional"before-after"comparisons of AL recipients and a control group of 62 countries. How have countries under adjustment lending performed? AL countries improved their external position, generating enough of a trade balance surplus to service their external debt. Fiscal indicatorsdeteriorated, however, a sign that macroeconomic imbalances remained. Finally, growth rates fell, reflecting deteriorating terms of trade and the difficulties of reducing absorption to the required degree. On nine economic indicators, AL recipients fared better overall than the non recipients - though the improvement varied between 53 and 33 percent, depending on the classification. Some improvements were mild, some statistically insignificant. Improvements are stronger for a group of 12 AL recipients that received 3 or more adjustment loans.

Suggested Citation

  • Faini, Riccardo & De Melo, Jaime & Senhadji-Semlali, Abdel & Stanton, Julie, 1989. "Macro performance under adjustment lending," Policy Research Working Paper Series 190, The World Bank.
    • Handle: RePEc:wbk:wbrwps:190
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    References listed on IDEAS

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    Cited by:

    1. Dreher, Axel & Vaubel, Roland, 2000. "Does the IMF cause moral hazard and political business cycles? : Evidence from panel data," Discussion Papers 598, Institut fuer Volkswirtschaftslehre und Statistik, Abteilung fuer Volkswirtschaftslehre.
    2. Graham Bird & Dane Rowlands, 2000. "The catalyzing role of policy-based lending by the IMF and the World Bank: fact or fiction?," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(7), pages 951-973.
    3. Wasseem Mina & Jorge Martinez-Vazquez, 2002. "IMF Lending, Maturity of International Debt and Moral Hazard," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0301, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    4. Ratha, Dilip, 2001. "Complementarity between multilateral lending and private flows to developing countries : some empirical results," Policy Research Working Paper Series 2746, The World Bank.
    5. Mozammel Huq & Michael Tribe, 2004. "Economic development in a changing globalized economy," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(7), pages 911-923.
    6. Jeffrey A. Frankel & Nouriel Roubini, 2001. "The Role of Industrial Country Policies in Emerging Market Crises," NBER Working Papers 8634, National Bureau of Economic Research, Inc.

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