The Institutional Influence on a Developing Country's Economy

The IMF has been playing a leading role in poverty
reduction activities. Its Poverty Reduction and
Growth Facility (PRGF) grogram provides resources to
low-income countries aiming to foster durable
growth, thereby raising living standards and
reducing poverty. Many developing countries have
participated in the program. But the results are not
always good. Some countries experienced painful
times with low growth gate and even depression.
Much debate has been made over the effects of IMF-
supported stability-oriented programs. A proper
standard for measuring the effectiveness is to
compare the macroeconomic outcomes under the program
with the outcomes that would have emerged in the
absence of the program. The difficulty lies in that
it is not possible to have both of the outcomes
because in reality, we can only have one experience.
In this study, we use a system dynamics national
model as a base and test its long-term behavior with
and without IMF s poverty reduction program. Base on
the simulation result, we can compare the two
outcomes, thus, study the long-term effect of IMF''s
poverty reduction program.

Autorentext

Ying Qian is a research fellow and PhD candidate in
University of Agder, Norway. She obtained her Master of
Philosophy in Systems Dynamics in University of Bergen in 2004.
Her Bachelor degree is from Fudan University in Shanghai, China.

Klappentext

The IMF has been playing a leading role in poverty
reduction activities. Its Poverty Reduction and
Growth Facility (PRGF) grogram provides resources to
low-income countries aiming to foster durable
growth, thereby raising living standards and
reducing poverty. Many developing countries have
participated in the program. But the results are not
always good. Some countries experienced painful
times with low growth gate and even depression.

Much debate has been made over the effects of IMF-
supported stability-oriented programs. A proper
standard for measuring the effectiveness is to
compare the macroeconomic outcomes under the program
with the outcomes that would have emerged in the
absence of the program. The difficulty lies in that
it is not possible to have both of the outcomes
because in reality, we can only have one experience.

In this study, we use a system dynamics national
model as a base and test its long-term behavior with
and without IMF's poverty reduction program. Base on
the simulation result, we can compare the two
outcomes, thus, study the long-term effect of IMF's
poverty reduction program.