, Volume 6, Issue 2, pp 189-213
Date: 24 May 2011

How soon is now? The effects of the IMF on economic reforms in Latin America

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This study assesses the effects of IMF loans on economic liberalization in Latin America. Specifically, we are interested in whether the Fund receives greater cooperation from Latin American borrowers in the initiation of some economic reforms over others. Using a two-stage treatment effects model as well as panel-corrected standard error (PCSE) regression for 15 Latin American countries from 1980 to 2003, we find that IMF participation tends to lead to greater trade and capital reforms and less reform in privatization. These relationships are tempered by the country’s relationship with the United States along with domestic group pressures.