AGS Alumnus and Advisor Co-author Article in the Public Policy Review of University College London

AGS Alumnus Brandon Roddey, M.A., and his AGS thesis advisor Phillip A. Cartwright (Professor of Economics at ESG Management School), had their article "A Note on Preliminary Tests of a Public Choice Framework for Understanding Welfare Effects of IMF Lending" accepted for publication in University College London's International Public Policy Review (Fall 2012, forthcoming).

The paper presents preliminary results on the relationship between the use of International Monetary Fund credit, conditionality and welfare for both the IMF and recipient countries in the context of a public choice model proposed by Bird (1995). While the model is familiar, this paper uses a data set constructed from the Monitoring of Fund arrangements Database for 2002 – 2009 covering 85 countries (of which 78 are used in the analysis), preliminary tests bases on correlation analyses are reported. Overall, preliminary results from aggregate data supports the hypothesis that IMF utility (pass rate) increases as the amount of lending to a recipient country increases. Increasing conditionality is associated with lower Pass Rates. Based on bivariate tests, the work rejects the hypothesis that IMF utility decreases when lending increase relative to conditionality. For the borrowing or recipient country, the hypothesis that higher conditionality is associated with lower welfare (Real GDP, Purchasing Power Parity per capita) is rejected at any reasonable level of significance. The findings do support the hypothesis that recipient country utility and fund credit are positively correlated.