Institutions, Program Implementation, and Macroeconomic Performance

By Saleh M. Nsouli, Ruben V Atoyan, Alex Mourmouras

September 1, 2004

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Saleh M. Nsouli, Ruben V Atoyan, and Alex Mourmouras. Institutions, Program Implementation, and Macroeconomic Performance, (USA: International Monetary Fund, 2004) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper assesses empirically the links among a country's institutions and political environment, its implementation of IMF-supported programs, and macroeconomic performance in a sample of 197 programs approved between 1992 and 2002. We find that a stronger institutional and political environment is associated with better macroeconomic outcomes, especially at longer time horizons. This direct beneficial effect of institutions on macroeconomic outcomes is in addition to their indirect effect through better program implementation. We also find that program implementation exerts an independent influence on macroeconomic outcomes, especially over shorter time horizons of up to two years. Better-implemented programs are associated with lower inflation and with initially weaker but ultimately stronger external and fiscal outcomes, but with a statistically insignificant impact on economic growth.

Subject: Corruption, Current account, Current account balance, Fiscal stance, Inflation

Keywords: IMF-supported program, Program implementation, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/184
Stock No:

WPIEA1842004
ISBN:

9781451859393
ISSN:

1018-5941

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