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Title:Agency and communication in IMF conditional lending: Theory and empirical evidence PDF Logo
Authors:Marchesi, Silvia
Sabani, Laura
Dreher, Axel
Issue Date:2009
Series/Report no.:KOF working papers // Konjunkturforschungsstelle, Eidgenössische Technische Hochschule Zürich 218
Abstract:We focus on the role that the transmission of information between a multilateral (the IMF) and a country has for the optimal design of conditional reforms. Our model predicts that when agency problems are especially severe, and/or IMF information is valuable, a centralized control is indeed optimal. To the contrary, when local knowledge is more important than the agency bias we expect delegation to dominate. Controlling for economic and political factors, our empirical tests show that the number of IMF conditions is lower in countries with a greater social complexity, while it increases with the bias of the countries' authorities, openness, and transparency, consistently with the theory.
Subjects:IMF conditionality
delegation
communication
panel data
JEL:C23
D82
F33
N2
Persistent Identifier of the first edition:doi:10.3929/ethz-a-005778388
Document Type:Working Paper
Appears in Collections:KOF Working Papers, KOF Konjunkturforschungsstelle, ETH Zürich

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