NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Do External Interventions Work? The Case of Trade Reform Conditions in IMF Supported Programs

Shang-Jin Wei, Zhiwei Zhang

NBER Working Paper No. 12667
Issued in November 2006
NBER Program(s):   IFM   ITI

Trade reform conditions are common in IMF supported programs. Of the 99 countries that had IMF programs during 1993-2003, 77 had conditions on trade reforms in their programs. Since the WTO has not been found especially effective in promoting trade openness for most developing countries, it is of great interest to see if the IMF has been more effective as it combines carrots and sticks not available to the WTO. Yet, the effectiveness of trade conditions in IMF programs has not been systematically studied. Using a unique dataset, this paper provides such an assessment. It finds that trade conditions are associated with an increase in trade openness on average, but the effect comes mostly from countries that, by some measure, have a high degree of "willingness to reform."

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Document Object Identifier (DOI): 10.3386/w12667

Published: Wei, Shang-Jin and Zhiwei Zhang. "Do external interventions work? The case of trade reform conditions in IMF supported programs." Journal of Development Economics 92, 1 (2010): 71-81.

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