Why should multilateral lending exist in a world where private capital markets are well developed and governments have their own bilateral aid programs? If lending by the World Bank, IMF, and regional development banks has an independent rationale, it must rest on advantages generated by the...

We argue that the disincentive effect of a debt overhang is generally small and consequently that debt reduction does not lead to important efficiency gains on this account. Instead, we develop a framework that highlights the inefficiency created by the liquidity constraint faced by...

This paper raises several cautionary notes regarding high-conditionality lending by the International Monetary Fund and the World Bank in the context of international debt crisis. It is argued that the role for high-conditionality lending is more restricted than generally believed, because...

The paper analyses the role of fiscal policy in the restoration of internal and external macroeconomic equilibrium and in achieving structural adjustment i.e. major changes in the patterns of sectoral and intertemporal resource allocation. The focus is on developing and new industrial countries...

The paper presents a non-technical survey of some of the issues involved in the design of stabilization policy 10 developng countries with special emphasis on policy responses to external shocks. First, the six imost imortant external economic parameters of developing countries are reviewed; I)...

In this paper, the authors describe a simulation model for analyzing the effects of macroeconomic policies in the OECD on global macroeconomic equilibrium. Particular attention is paid to the effects on developing countries of alternative mixes of monetary and fiscal policies in the OECD.Though...

This paper advances the hypothesis that the world debt crisis was mainly induced by the dramatic rise of US interest rates in the first half of the eighties. It sees this rise in interest rates primarily as a result of a tight US monetary policy and excessively large investment incentives...

On their fiftieth anniversary, the International Monetary Fund and the World Bank were" extensively reviewed, both to mark the occasion and to consider, often critically roles and performance. This paper reviews the functions of the two institutions in light of their" evolution over the past...

To update a famous old statistic: a political leader in a developing country is almost twice as likely to lose office in the 6 months following a currency crash as otherwise. This difference, which is highly significant statistically, holds regardless whether the devaluation takes place in the...

This paper investigates the output effects of IMF-supported stabilization programs, especially those introduced at the time of a severe balance of payments/currency crisis. Using a panel data set over the 1975-97 period and covering 67 developing and emerging-market economies (with 461 IMF...