 Catalyzing Private Capital Flows: Do IMF Programs Work as Commitment Devices?Ashoka Mody and Diego Saravia () No 280, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile. Abstract: An objective of IMF programs is to help countries improve their access to international capital markets. In this paper, we examine if Fund programs influence the ability of developing country issuers to tap international bond markets and whether they improve spreads paid on the bonds issued. We find that Fund programs do not provide a uniformly favorable signaling effect, i.e., the mere presence of the IMF does not act as a strong seal of good housekeeping. Instead, the evidence is most consistent with a positive effect of IMF programs when they are viewed as likely to lead to policy reform and when undertaken before economic fundamentals have deteriorated significantly. The size of the Fund's program matters, but the credibility of a joint commitment by the country and the IMF appears to be critical. Keywords: Programs; signaling; capital market access (search for similar items in EconPapers) Published as "Catalyzing Capital Flows: Do IMF-Supported Programs Work as Commitment Devices?", The Economic Journal, Nº 116, pp. 1-26, julio 2006. Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:280 Access Statistics for this paper More papers in Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile. Contact information at EDIRC. |
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