A True Test : Do IMF Programs Hurt the Poor?

This paper uses a fixed-effects model to analyze the effect of IMF programs on poverty with data from 82 countries during 1985 to 2000. Two indicators of poverty, infant mortality rates and the Human Development Index (HDI), are utilized, and the effects of the IMF's concessionary and nonconcessionary programs are investigated, as well as economic and governance factors. The results show that the IMF's programs have no significant direct impact on poverty. Growth and good governance, however, both have significant impacts, lowering infant mortality and increasing the HDI. The Fund's concecessionary programs increase the impact of growth on lowering infant mortality, while the nonconcessionary programs lower the impact of growth on the HDI. We also test for the impact of IMF programs on growth. Concessionary programs have a significant contemporaneous positive effect, while nonconcessionary programs have a significant lagged positive effect