Resistance to Implementing IMF Stabilization Plans: Evidence from a Cross-Country Study

Abstract

The paper addresses three aspects of the country's resistance to meet the targets of IMF stabilization plans. First, a definition and an indicator of such phenomenon is provided. The fact that resistance is found to be important poses doubts about presumed impacts of IMF programs such as in Pastor (1987). Second, a logit model is fitted to a data set of 43 countries to search for the resistance factors. The magnitude of the external shocks as well as income concentration were found to be relevant. The results obtained for this last variable are partially in line with the empirical evidence of Berg and Sachs (1988) and the theoretical motivation of Alesina and Drazen (1989). Third, a few policy implications are derived regarding the difficulties national and supra-national authorities are likely to face in attempting to enforce IMF stabilization measures.