The name is absent

This model provides a good explanation of drawings by developing countries
on the IMF in 1976, but it “breaks down” in the following year. On the basis of the
1976 regression, developing countries seem to draw more from the Fund as their
balance of payments deteriorates, their rates of in≠ation increase and their level
of income decreases. It also seems that the IMF and the Eurocurrency market are
complementary rather than competing sources of ...nance. However, the authors’
conclusion is that not only economical factors, but also socio-political (and also
information more at the level of single countries), would be necessary to provide
a better explanation of IMF loans.⁵

Cornelius (1987) studies the demand for IMF credits focusing only on Sub-
Saharan countries (mainly because they made a large use of Fund credit as they
were constrained in the access to international capital market). Following Bird and
Orme, he assumes that drawings on the IMF increase when economic problems
become more serious. The demand for IMF loans is found to be positively a∏ected
by the debt-service ratio, the value of imports and de.cits of the BOP; whi le it
is inversely related to the per capita GNP (supposed to be a measure of the
stage of development), the level of international reserves and of borrowing from
foreign and international markets.⁶ Using a pooled sample of annual observati ons
for eleven countries, his results are similar to those obtained by Bird and Orme:
they provide a good explanation for the initial period (1975-’77) but not for the
second one (1981-’83). In particular, (as in the previous work) the results for the
second period imply that IMF drawings are not a purely economic phenomenon
and therefore other factors, like social, i nstitutional and political ones, should be
taken into account.

Among the papers which adopted binary choice models, Joyce (1992) uses a
⁵A rerun of a similar econometric model for t he period 1980-’85 by Bird (1995) prod uces
rather similar results: the coe^ients of the in≠ation, income and balance of payments variables
are all statistically signi.cant and with the expected signs.

⁶This would suggest that IMF loans, on one side, and the decumulation of reserves and the
level of borrowing from abroad, on the other, are substitutes.

<<   5   6   7   8   9   10   11   >>

More intriguing information