IMF Lending and Banking Crises

This paper looks at the effects of IMF lending programs on banking crises in a large sample of developing countries 1970- 2010

From:
Department for International Development
Published
15 October 2015
Document Type:
Journal Article
Theme:
Economic Growth
Authors:
Papi, L, Presbitero, A, Zazzaro, A

Abstract

This paper looks at the effects of International Monetary Fund (IMF) lending programs on banking crises in a large sample of developing countries, over the period 1970-2010. The endogeneity of the IMF intervention is addressed by adopting an instrumental variable strategy and a propensity score matching estimator. Controlling for the standard determinants of banking crises, our results indicate that countries participating in IMF-supported lending programs are significantly less likely to experience a future banking crisis than non-borrowing countries. The authors also provide evidence suggesting that compliance with conditionality and loan size matter.

This work is part of the ‘Macroeconomics in Low-income countries’ programme

Citation

  • Luca Papi, Andrea Presbitero, Alberto Zazzaro (2015) IMF Lending and Banking Crises. IMF Working Paper No. 15/19

  • Papi, L., Presbitero, A., Zazzaro, A. IMF Lending and Banking Crises. IMF Economic Review (2015) 63: 644. https://doi.org/10.1057/imfer.2015.16

Published 15 October 2015
Contents