Do External Interventions Work? The Case of Trade Reform Conditions in IMF Supported Programs

Shang-Jin Wei and Zhiwei Zhang

No 12667, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Trade reform conditions are common in IMF supported programs. Of the 99 countries that had IMF programs during 1993-2003, 77 had conditions on trade reforms in their programs. Since the WTO has not been found especially effective in promoting trade openness for most developing countries, it is of great interest to see if the IMF has been more effective as it combines carrots and sticks not available to the WTO. Yet, the effectiveness of trade conditions in IMF programs has not been systematically studied. Using a unique dataset, this paper provides such an assessment. It finds that trade conditions are associated with an increase in trade openness on average, but the effect comes mostly from countries that, by some measure, have a high degree of "willingness to reform."

JEL-codes: F10 F13 F33 (search for similar items in EconPapers)
Date: 2006-11
New Economics Papers: this item is included in nep-dev and nep-int
Note: IFM ITI
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Citations: View citations in EconPapers (4)

Published as Wei, Shang-Jin and Zhiwei Zhang. "Do external interventions work? The case of trade reform conditions in IMF supported programs." Journal of Development Economics 92, 1 (2010): 71-81.

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