financial emergencies by extending generous loans to the countries under pressure in
Latin America and Asia.
The aggregation of IMF and World Bank disbursements under a single heading hides,
none the less, a number of interesting patterns. There are indeed some relevant
differences between the two institutions. Consider first the behavior of disbursements to
Asia (Figure 3). Three facts stand out. First, the World Bank provides a significantly
larger amount of resources to this region in any given year than the IMF. Second, the
trend of disbursements for the World Bank, but not for the International Monetary Fund,
is clearly downward. Third, while World Bank’s disbursements show some rise in the
aftermath of a crisis, the IMF is much quicker to react to a balance of payments-financial
emergency than the World Bank Group.
More or less similar conclusions come from an examination of the patterns of
disbursements in Latin America (Figure 4). Again, the International Monetary Fund
reacts much more swiftly to the outburst of a crisis than the World Bank. Also, the role of
the latter as a provider of fresh finance is shrinking over the period. This time however,
the size of disbursements by the IMF seems to be at par with those of the World Bank
Group, particularly in the later years of the sample, possibly reflecting the protracted
economic emergency in the region.
The case of Sub Saharan Africa (Figure 5) deserves a separate mention. As noticed
before, the weight of total disbursements by the two IFI’s shows a negative trend.
Whether this simply reflects debt cancellations in the context of the Highly Indebted Poor
Countries (HIPC) program or some more fundamental reasons is too early to tell. We can
only speculate as to whether absorptive capacities in Sub Saharan African countries,
particularly their inability to stick to sound stances in policies, have represented a
stumbling block to the expansion of lending activities of the World Bank and the
International Monetary Fund in these countries in the 1980s and 1990s. Still, if persistent,
this trend needs to be carefully watched and better understood in its determinants. At any
rate, also for Sub Saharan Africa there are some relevant differences between the two
institutions. First, the role of the World Bank is now significantly larger than that of the
IMF. Second, in the case of Sub Saharan Africa, disbursements by the IMF are also on a
downward trend.
To sum up, the overall role of the IFI’s, and in particular that of the World Bank, as a
source of development finance has been progressively eroded, most likely as a reflection
of the greater role of private capital markets in emerging countries. However, even in Sub
Saharan Africa, where private flows are conspicuously absent outside countries with
mineral resources, the World Bank has been unable to play an expanded role or even to
fully hold her ground as a lender. IFI’s have been substantially more effective, in terms of
lending volumes, in their response to balance of payments crises. By and large, however,
this positive finding reflects mainly the behavior of the IMF.
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