Economic adjustment and reform programs, including those supported by international financial institutions (IFIs), must cope with informational asymmetries and special interest politics. This presents a particularly serious issue when IFIs make structural economic reforms a condition for...

International financial assistance (loans and grants) can potentially raise recipients'' welfare in two ways, by affecting a direct resource transfer and by facilitating efficiency-enhancing reforms. In practice, barriers to reform limit the potential of assistance to deliver these two...

Although various factors point to a more arduous and longer transition in Russia than in Eastern Europe, the broad policy approach should be similar. A necessary condition for effective macroeconomic stabilization is the imposition of hard budget constraints on enterprises. Financial assistance...

External shocks pose major challenges to fiscal policy makers through lower output and large fiscal imbalances. This paper analyzes the case of Moldova, which faced parallel crises a decade apart: the Russian crisis of 1998 and the global financial crisis of 2008-2009. The country went through...

The separate identification of current and capital transfers was introduced for the first time in the fifth edition of the Fund’s Balance of Payments Manual (Manual), thus harmonizing with the treatment of transfers in the 1993 System of National Accounts (1993 SNA). Capital transfers are now...

Shocks stemming from Brazil - the large neighbor in South America - have historically been a source of concern for policy-makers in other countries of the region. This paper studies the importance of Brazil's influence on its neighboring economies, documenting trade linkages over the last two...