Publication

This paper examines claims that the International Monetary Fund (IMF) precipitated financial crises in the 1990s by prematurely pressuring developing countries to liberalize their capital accounts. The authors use data from 1982-80 to examine whether changes in the governance of capital flows occurred during participation in IMF programs.They compare the economic and financial characteristics of countries that 'de-controlled' during IMF programs with those of countries who did so independently. The results show that IMF program participation correlates with capital account liberalization episodes.