Adoption of an IMF Programme and Debt Rescheduling: An Empirical Analysis
CSGR Working Paper No. 56
33 Pages Posted: 8 Nov 2001
Date Written: May 2001
Abstract
The existence of an empirical relationship between the adoption of an IMF programme and the concession of a debt rescheduling by commercial creditors is tested using a bivariate probit model. If countries who have arrangements with the IMF are more likely than others to obtain a rescheduling of their external debt we could conclude that the adoption of an IMF programme could work as a sort of signal of a country's "good willingness", which is thus rewarded with the debt relief. The results confirm the existence of a significant effect of the adoption of an IMF programme on the subsequent concession of a debt rescheduling by creditors.
Keywords: IMF Conditionality, Debt Rescheduling, Bivariate Probit
JEL Classification: F34, C35
Suggested Citation: Suggested Citation
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