The econometric literature has been unable to establish a robust association between foreign aid and growth and poverty reduction. In this paper we argue that aid effectiveness must be assessed using methods that go beyond cross-country regressions. We calibrate a dynamic general equilibrium...

Economic adjustment and reform programs, including those supported by international financial institutions (IFIs), must cope with informational asymmetries and special interest politics. This presents a particularly serious issue when IFIs make structural economic reforms a condition for...

In many countries of the former Soviet Union, pensioners form a large and vulnerable group of the population, with pensions fixed in nominal terms. Attempts to quot;protectquot; this group have included a revaluation of benefits for retirees and the introduction of indexation arrangements based...

Understanding of the domestic political environment is key to building broad country ownership and the successful implementation of reform programs supported by international financial institutions (IFIs). But recipient countries are not unitary actors: policymakers are influenced by special...

IMF lending is generally conditional on specified policies and outcomes. These conditions usually are negotiated compromises between policies initially favored by the Fund and by the country`s authorities. In some cases the authorities might be satisfied enough with the outcome to take...

This paper assesses the implementation of IMF-supported programs using measures of program interruptions, compliance with conditionally, and the share of committed funds disbursed. The econometric model allows an evaluation of the importance for program implementation of political conditions in...

We analyze how the altruism of an international financial institution (IFI) towards its low-income member countries (LICs) alters the effectiveness of its loans. We study IFI loans to a credit-constrained LIC. The IFI`s repayment policy is determined by the interplay of its concerns for the...

Improving the effectiveness of financial assistance programs is a priority of international financial institutions (IFIs). This paper examines the effectiveness of alternative assistance instruments in a dynamic political economy framework. Economic policies of the receiving country are...

This paper offers possible explanations for three generally observed facts about fiscal policy and development: (F1) The relative size of government increases as an economy develops, (F2) The rise in government and taxation are associated with rising or constant economic growth rates, and (F3)...

Virtually all developing economies, now and in the past, have large gaps in labor productivity across sectors. We argue the presence of a traditional sector of family-based production, where markets for land and labor are nonexistent or underdeveloped, is important in explaining the persistence...