The Determinants of IMF Loan Programs

Abstract

This paper focuses on the bargaining process underlying financial arrangements between the IMF and recipient countries. The primary aim is to investigate the relationship between the own country characteristics, both in terms of macroeconomic conditions and bargaining power, and the outcome of the agreement with the Fund. IMF lending practices respond to economic conditions but are also sensitive to other factors that reflect the importance of the country within the international financial community (measured by the bilateral trade volume between the country and the OECD countries and by debt service) and the importance of the country within the international politics (measured by the UN voting patterns between the country and the USA, the colonial past and by country share of IMF quotas).