Structural Reforms and IMF Programs and Capacity Building: An Empirical Investigation

• Author: Rabah Arezki - Marc Quintyn - Frederik Toscani
• Pages: 1-4

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Volume 14, Number 2 June 2013

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B U L L E T I N

1

The Economics of Political Transitions:

Implications for the Arab Spring

Padamja Khandelwal and Agustín S. Roitman

Ongoing political transitions in many Arab

countries have led to social unre st and an

economic downturn, rais ing concerns about

the speed and strength of ec onomic recovery.

This article ide ntifies and examine s comparable

historical episod es of political instability and social unrest to derive implication s

for the near- and medium-term economic outlo ok in the Arab Countries in

Transition (Egypt, Jordan, Libya, Morocco, Tunisia, and Yemen). In general, past

episodes of political in stability were characterized by a sharp deter ioration in

macroeconomic outcomes and a slug gish recovery over the medium term. Recent

economic trends in the Arab Spring countr ies seem to be unfolding along similar

lines, although the weak exte rnal environment and large fiscal vulnerabilitie s

could result in a prolonged slump.

Structural Reforms and IMF Programs and

Capacity Building: An Empirical Investigation

Rabah Arezki, Marc Quintyn, and Frederik Toscani

This article investigates the role

played by the programs and

capacity development of the

International Monetary Fund

(IMF) in fostering structural

reforms in member countries by

utilizing two novel data sets on IMF capacity development and structural reforms

available for more than one hundred countries during the 1980–2010 period. We find

that IMF training leads to an increase in structural reforms, but only through IMF

programs and only when a significant share of public servants is trained. On the other

hand, IMF technical assistance does not significantly lead to more structural reforms,

but raises the likelihood of completion of ongoing IMF programs. These results suggest

that ongoing IMF capacity development activities increase the likelihood that a sub-

sequent IMF program provides a window of opportunity for reforms in which IMF

program conditionality and governments’ reform ownership reinforce each other.

In This Issue

1 Structural Reforms

and IMF Programs and

Capacity Building: An

Empirical Investigation

1 The Economics of Political

Transitions: Implications

for the Arab Spring

6 Q&A: Seven Questions on

the Neutral Interest Rate in

Latin America and Beyond

9 IMF Working Papers

12 Recommended Readings

from the IMF bookstore

13 IMF Economic Review

13 ARC Announcement

14 Staff Discus sion Notes

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Research Summaries

(continued on page 4)