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Revisiting the Effects of IMF Programs on Poverty and Inequality

Summary

Investigating how lending programs of the International Monetary Fund (IMF) affect poverty and inequality, we explicitly address model uncertainty. We control for endogenous selection into IMF programs using data on 86 low- and middle income countries for the 1982–2009 period and analyze program effects on various poverty and inequality measures. The results rely on averaging over 90 specifications of treatment effect models and indicate adverse short-run effects of IMF agreements on poverty and inequality for the whole sample, while for a 2000–09 subsample the results are reversed. There is evidence that significant short-run effects might disappear in the long-run.

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