IMF Member Research Articles

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

The Dance of Debt and Growth in South Asian Economies: Panel ARDL and NARDL Evidence

This article explores the complicated relationship between external debt and economic growth in South Asian IMF member countries, emphasizing the critical role of external debt in financing development while underscoring the necessity of sensible debt management. Using a diverse regional context, including case studies of India, Bangladesh, Sri Lanka, and Pakistan, it highlights the impact of external debt on economic trajectories within distinct national settings. Employing a comprehensive dataset spanning over three decades and utilizing both Panel Autoregressive Distributed Lag (PARDL) and Panel Nonlinear Autoregressive distributed lag (PNARDL) techniques, the study reveals significant insights into short-term, long-term, and asymmetric dynamics in this relationship. The results underline the importance of sustainable borrowing practices and sensible debt management to sustain long-term economic prosperity. Additionally, the article emphasizes the integral role of government stability, the significance of addressing domestic production limitations, and the critical need for price stability. Policy recommendations are offered to guide South Asian nations in optimizing the positive impact of external debt on economic growth while avoiding potential pitfalls. Overall, this research contributes valuable insights for policymakers and scholars, shedding light on the intricate dynamics of economic growth in this region.

Dynamics of Use of IMF Debt: Evidence from IMF Members Countries

This research scrutinize dynamics of use of IMF credit on the growth performance of the ten most heavily indebted countries of the world. The study employs a panel of ten countries during the period 1990-2022. Multiple tests, including LLC, IPS, Maddala-WU, and Fisher Augmented DF, reveals mixed order of integrations. Additionally, the panel co-integration tests by Pedroni, Kao, and Westerlund indicate existence of steady state equilibrium between growth performance and use of IMF loans taken by the sampled countries. The empirical results indicate that the use of IMF credit significantly and adversely affects the economic growth of these ten highly indebted countries. Moreover, the study identifies detrimental effects stemming from government expenditure, debt servicing, and inflation on economic growth. The study proposes that governments should implement austerity measures, search for alternative debt sources and control on imports and ensure proper utilization of IMF credit to save foreign reserves.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

Do geopolitical interests affect how financial markets react to IMF programs?

We study the effect of geopolitics on short-term financial market reactions to IMF program approvals. If IMF programs are influenced by geopolitics, they may be less successful in stabilizing the economy. This could lead financial market participants to sell the country’s assets and thus reduce the catalytic effect of IMF programs. Using a monthly panel data set for about 100 IMF members covering 1993-2019, we find that if geopolitics are involved, the approval of a new IMF program increases risk aversion of financial market participants. To measure geopolitical interest, we focus on program approvals for temporary members of the United Nations Security Council (UNSC). We find that temporary UNSC members receiving an IMF program face higher bond and bill yields, depreciating exchange rates, and weaker stock market developments. This is consistent with investors reducing exposure to the country’s financial assets. Such a negative investor reaction is not observed for IMF program approvals for non-UNSC temporary members.

Inclusion of IMF in Eurozone Crisis Management: Legitimacy Through External Expertise and Internal Depoliticisation

ABSTRACT A new technocratic knowledge regime emerged in Europe in 2010. Known as the Troika, it included the European Commission, the European Central Bank, and the IMF. The Greek Stand-By Arrangement was the IMF’s first Eurozone financial assistance involvement, controversial for both the EU and the IMF. We trace how the IMF entered the process, focusing on why EU institutions involved it. We used official documents, statements, and a unique set of 129 interviews with IMF and EU decision-makers and Member State officials. We argue that the EU sought the IMF’s expertise in loan and conditionality negotiation, public image credibility, perceived guarantee for austerity, and depoliticisation. They were internally motivated by lack of confidence in the European Commission among EU Member States. Legitimacy was sought externally through the IMF’s expertise. The IMF continued its previous depoliticising role, a crucial strategy in crisis management, now in a novel multilevel context.

List of IMF Member Countries With Delays In Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

"Volume 2022 (2022): Issue 060 (Dec 2022): List of IMF Member Countries With Delays In Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months" published on 19 Dec 2022 by International Monetary Fund.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

"Volume 2022 (2022): Issue 030 (Jun 2022): List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months" published on 24 Jun 2022 by International Monetary Fund.

De Facto Bank Bailouts

AbstractThe U.S. government uses its voting power to direct IMF loans to countries where U.S. banks are exposed to sovereign default (a de facto bailout). This effect is stronger in years when the costs of direct bailouts are higher and is also found among major European IMF members. We find that de facto bailouts reduce government incentives to default and that U.S. Congressional voting on IMF funding is consistent with a private interest view of government. Overall, we identify an alternative mechanism through which governments can backstop the losses of large multinational banks.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

December 2021 List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

List Of IMF Member Countries With Delays In Completion Of Article Iv Consultations Or Mandatory Financial Stability Assessments Over 18 Months

List Of IMF Member Countries With Delays In Completion Of Article Iv Consultations Or Mandatory Financial Stability Assessments Over 18 Months

Cook Islands

A mission was requested by the New Zealand authorities to the Cook Islands to focus on policy options for transitioning to high-income status, financial sector stability and regulatory framework, and debt sustainability.1 It evaluated these issues in the context of the medium-term outlook and against the context of a recently developed fiscal framework. The Cook Islands is a self-governing territory in free association with New Zealand, but it is not an IMF member (Box 1).

Weighted voting on the IMF Managing Director

Executive Directors of the International Monetary Fund elect the Fund’s Managing Director from a shortlist of three candidates; financial quotas of IMF members define the respective numbers of votes. The implied a priori distribution of success (preference satisfaction) is compared across different electoral procedures. The USA’s Executive Director can expect to come closer to its top preference under plurality rule than for pairwise majority comparisons or plurality with a runoff; opposite applies to everybody else. Differences of US success between voting rules dominate the within-rule differences between most other Directors, and much of the latest reform of quotas.

Back to the Future: IMF Article VIII Section 2 (B) - A Sovereign Debt Standstill Mechanism

This article provides a proposal to use IMF Article VIII, Section 2 (b) to establish a binding mechanism on private creditors for a sovereign debt standstill. The proposal builds on the original idea by Whitney Deveboise (1984). Using arguments brought forward by confidential IMF staff papers (1988, 1996) and the IMF General Counsel (1988), this paper shows how an authoritative interpretation of Article VIII, Section 2 (b) can provide protection from litigation to countries at risk of debt distress. The envisaged mechanism presents several advantages over recent proposals for a binding standstill mechanism, such as the International Developing Country Debt Authority (IDCDA) by UNCTAD and a Central Credit Facility (CFF) by the Bolton Committee. First, this approach would not require the creation of new intergovernmental mechanisms or facilities. Second, the activation of the standstill mechanism can be set in motion by any IMF member country and does not require a modification of its Articles of Agreement. Third, debtor countries acting in good faith under an IMF program would be protected from aggressive litigation strategies from holdout creditors in numerous jurisdictions, including the US and the UK. Fourth, courts in key jurisdictions would avoid becoming overburdened by a cascade of sovereign debt litigation covering creditors and debtors across the globe. Fifth, private creditors would receive uniform treatment and ensure intercreditor equality. Sixth and last, the mechanism would provide additional safeguards to protect emergency multilateral financing provided to tackle Covid-19.

De Facto Bank Bailouts

The U.S. government uses its voting power to direct IMF loans to countries where U.S. banks are exposed to sovereign default—a de facto bailout. This effect is stronger in years when the costs of direct bailouts are higher and is also found among major European IMF members. We find that de facto bailouts reduce government incentives to default and that U.S. Congressional voting on IMF funding is consistent with a private interest view of government. Overall, we identify an alternative mechanism through which governments can backstop the losses of large multinational banks.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

In accordance with Executive Board Decision No. 15106-(12/21), the Fund will publish on its external website a list of member countries whose Article IV consultations or mandatory financial stability assessments have been delayed by more than 18 months, as of December 15, 2019, since the expected deadline for conclusion.

Macroeconomic Developments and Prospects in Low-Income Developing Countries—2019

This paper is the fifth in a series that examines macroeconomic developments and prospects in low-income developing countries (LIDCs). LIDCs are a group of 59 IMF member countries primarily defined by income per capita below a threshold level. LIDCs contain one fifth of the world’s population—1.5 billion people—but account for only 4 percent of global output. The first chapter of the paper discusses recent macroeconomic developments and trends across LIDCs and, using growth decompositions, explores the key drivers of growth performance in LIDCs. A second chapter examines the challenges faced by LIDCs in implementing a value-added tax system, generally seen as a key component of a strong national tax system. The third chapter discusses how financial safety nets can be appropriately tailored to the specific needs of LIDCs, recognizing that an effective safety net is important for ensuring financial stability and underpinning public confidence in the financial system, thereby promoting financial intermediation.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

In accordance with Executive Board Decision No. 15106-(12/21), the Fund will publish on its external website a list of member countries whose Article IV consultations or mandatory financial stability assessments have been delayed by more than 18 months, as of June 15, 2019, since the expected deadline for conclusion.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

In line with the framework for addressing excessive delays in the completion of Article IV consultations, the following table lists the IMF members for whom the Article IV consultation has been delayed by more than 18 months as of December 15, 2018.

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments Over 18 Months