Creating Policy Space in Low-Income Countries during the Recent Crises (original) (raw)

2010, International Monetary Fund eBooks

Low-income countries have been hit hard by the sharp increases in world food and fuel prices in 2007-08 and subsequently by the global financial crisis and ensuing recession. The International Monetary Fund (IMF) has responded quickly to the need of its low-income country members to address the impact of these global shocks. It has substantially scaled up its financial assistance to low-income countries and revamped its concessional lending facilities to make them more flexible. Together with the ongoing reforms to streamline structural conditionality, these efforts have formed an important part of the IMF's strategy to help low-income countries address the fallout from the crises. This Departmental Paper provides an initial empirical assessment of the outcome of these efforts and reforms. It examines the responsiveness of macroeconomic policies and structural conditionality in recent IMFsupported programs in a number of low-income countries. We hope the results of this exercise will help improve understanding of how IMFsupported programs in low-income countries have been adapted to the changing economic circumstances and which aspects of program design may need further improvement in the future. Many people contributed to the undertaking of this exercise and to the production of this paper. Hugh Bredenkamp, Deputy Director of the Strategy, Policy, and Review Department of the IMF, and Catherine Pattillo, Advisor and Chief of the Low-Income Countries Strategy Unit of the Department, oversaw the exercise and provided invaluable guidance. The paper benefited enormously from data and comments provided by many staff, both within and outside the Strategy, Policy, and Review Department. Neri Gomes helped with administrative and editorial work, and Joanne Blake and her team helped turn the original paper into this Departmental Paper. We are grateful to all these colleagues.

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