Stabilization Programs and External Enforcement: Experience from the 1920s
48 Pages Posted: 15 Feb 2006
Date Written: January 1993
Abstract
Credibility and financing problems are important reasons why countries may seek to involve external institutions in the design and implementation of stabilization programs. In particular, governments may rely on external institutions to `enforce` programs that would otherwise lack credibility. This paper analyzes six European currency stabilizations sponsored by the League of Nations in the 1920s. It emphasizes the means by which the League provided a `commitment technology` and enforced compliance, thereby helping to ensure successful stabilizations. Empirical evidence indicates that countries with greater credibility problems relied more heavily on external enforcement to stabilize their currencies.
JEL Classification: E61, F33, N24
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
IMF Programs: Who is Chosen and What are the Effects?
By Robert J. Barro and Jong-wha Lee
-
Economic Determinants of Fund Financial Arrangements
By Malcolm Knight and Julio A. Santaella
-
Does IMF Financing Result in Moral Hazard?
By Timothy Lane and Steven Phillips
-
Does the IMF Cause Moral Hazard and Political Business Cycles? Evidence from Panel Data
By Axel Dreher and Roland Vaubel
-
The Macroeconomic Effects of Fund-Supported Adjustment Programs: An Empirical Assessment
-
Conditionality and Ownership in IMF Lending: A Political Economy Approach
By Allan Drazen
-
Debt Relief for Low-Income Countries and the Hipc Initiative
By Anthony Boote and Kamau Thugge