Does it take two to tango? Improving cooperation between the IMF and the World Bank: theory and empirical evidence

Silvia Marchesi and Laura Sabani

No 280, Working Papers from University of Milano-Bicocca, Department of Economics

Abstract: In this paper we present a theoretical model which, focusing on the quality of information transmission between the IMF and the WB, analyzes the sources of the expected loss in the overall performance of the two institutions relative to the first best outcome, which is characterized by centralized decision and perfect information. In particular, given the Bank-Fund strong complementarities, we show that strategic communication is indeed the primary source of loss for the two institutions. A testable implication of the model is to relate Bank-Fund's performance to their willingness (or ability) to communicate. We find evidence that a Bank-Fund simultaneous loan is beneficial to growth and, consistently with the theory, such beneficial effect is reduced by factors preventing full communication, such as the degree of Bank-Fund competition and the salience of their private information.

Keywords: IMF and WB conditionality; coordination; communication (search for similar items in EconPapers)
JEL-codes: D83 F33 N2 (search for similar items in EconPapers)
Pages: 46
Date: 2014-10, Revised 2014-10
New Economics Papers: this item is included in nep-cba
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repec.dems.unimib.it/repec/pdf/mibwpaper280.pdf First version, 2014 (application/pdf)

Related works:
Working Paper: Does it Take Two to Tango? Improving Cooperation between the IMF and the World Bank: Theory and Empirical Evidence (2013)
Working Paper: Does it take two to tango? Improving cooperation between the IMF and the World Bank: theory and empirical evidence (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mib:wpaper:280

Access Statistics for this paper

More papers in Working Papers from University of Milano-Bicocca, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Matteo Pelagatti ().