Abstract
This paper analyzes the initial economic conditions before IMF financial arrangements are adopted. Evidence from 104 IMF arrangements in 74 developing countries during 1973-91 indicates that there are important differences between the characteristics of countries about to undergo a program and those of a control group. The program group exhibits weaker balance of payments, output growth, external conditions, and fiscal and credit policies than the control group; it is also characterized by a higher degree of external indebtedness and nominal exchange rate depreciation. In the case of the rate of inflation, investment, real effective depreciation, and the growth rate of money, the two groups appear to be statistically similar.
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