The determinants of IMF fiscal conditionalities: economics or politics?

• Autor(a) principal: Guimarães, Bernardo de Vasconcellos
• Data de Publicação: 2015
• Outros Autores: Ladeira, Carlos Eduardo de Almeida
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
• Texto Completo: http://hdl.handle.net/10438/13737
• topic: IMF; Conditionalities; Fiscal adjustment; Political proximity; Fiscal deficit; Economia; Fundo Monetário Internacional; Déficit fiscal

Conditionalites, measures that a borrowing country should adopt to obtain loans from the IMF, are pervasive in IMF programs. This paper estimates the effects of political and economic factors on the number of conditionalities and on the fiscal adjustment requested by the IMF. As found in the literature, political proximity of the borrowing country to the Fund’s major shareholders has an important effect on the number of conditions in an agreement. However, the fiscal adjusment requested by the IMF is strongly affected by the size of a country’s fiscal deficit but not by political proximity. We also find a very small correlation between the number of conditions and the fiscal adjustment requested by the IMF