The purpose of this paper is twofold: to apply to a group of low-income borrowers from the IMF, the most commonly used technique for measuring the independent effects on economic developments of IMF support; and to develop a minimum set of diagnostic tests for determining whether necessary conditions for using the methodology exist. The modified control-group methodology is used to measure the effect of IMF support on three key variables — output growth, inflation, and the external debt/service ratio. The sample comprises adjustment programs begun during 1986–1991 supported by the IMF's Enhanced Structural Adjustment Facility (ESAF). The distinguishing feature of the modified control-group approach is the estimation of a policy counterfactual — policies that would have been followed in the absence of IMF support against which to compare actual policies and resulting outcomes. Using this approach for the ESAF, the sample reveals statistically significant beneficial effects of IMF support on output growth and the debt/service ratio but no effects on inflation. Diagnostic tests of these results, rarely if ever reported in the literature, are shown to be critical in interpreting the validity of the results of assessments of adjustment lending. For this sample, at least, the diagnostic tests cast doubt on the reliability of estimates of the effects of IMF-supported programs using panel data in a modified control-group model. The most obvious and manageable modifications to the model do not overcome its basic weaknesses.

This study examines the links between adjustment policies and growth in a small group of developing countries- Bangladesh, Chile, Ghana, India, Mexico, Morocco, Senegal, and Thailand - during 1970 -93. It provides an overview of the adjustment and growth experience, examines in depth several policy issues of particular interest, and distills the principal policy lessons for the design of adjustment policies.

Since the mid-1960s, Thailand's growth performance has been exceptional. Although hard hit by the external shocks fo the late 1970s and the early 1980s that proved severely destabilizing to many developing countries, Thailand showed remarkable reslience: price stability was quickly restored, and the Thai economy emerged from this period with strong recovery in growth and investment, in an environment of overall macroeconomic stability. This study examines the evolution of investment and growth and Thailand's macroeconomic and structural policies, with a view to understanding the main factors that have led to this impressive economic performance.

This paper is Part I of a two-volume study conducted as a part of the IMF's ongoing process of evaluating its lending facilities. It focuses on IMF-supported programs and macroeconomic performance during 1988-92, reflecting information available through the end of 1993. Part I provides an overview of the experiences during the arrangements reviewed: it describes the initial conditions faced in these countries, the adjustment strategies adopted, the degree to which programs were implemented, and the extent of sustained adjustment experienced.

This paper examines whether ESAF-supported programs during 1986-91 had significant independent effects on growth, inflation and the external debt service ratio. Econometric estimates of the Generalized Evaluation Estimator (GEE) identify statistically significant beneficial effects on output growth and the debt service ratio but no effects on inflation. The robustness of these estimates is also examined. Diagnostic tests cast doubt on the applicability of the GEE framework to the ESAF-eligible countries, and the results obtained using it.

This paper is part II of a two-volume study conducted as a part of the IMF's ongoing process of evaluating its lending facilities. It focuses on IMF-supported programs and macroeconomic performance during 1988-92, reflecting information available through the end of 1993. Part I (Occasional Paper No. 128) provides an overview of the principal issues and findings and distills the main message for future programs. Part II presents detailed examinations of selected policy issues in five background papers.

A substantial literature exists on the impact of pension schemes, both public and private, on the level of household saving. Yet there is no clear consensus on the impact of pensions on private saving. In this paper we show how beliefs about this displacement effect are modified by prior beliefs both about variables which might be relevant in an equation for private savings and about the magnitude of the displacement effect. Using data for 8279 Canadian households, and estimates of pension wealth (both private and social security), which we construct for each household in the sample, the estimated displacement effects are found to be relatively robust with respect to both types of prior belief.

This paper presents new estimates of the taxes paid on nonfinancial corporate capital, on the pretax rate of return to capital, and on the effective tax rate. The basic time series show that both the pretax rate of return and the effective tax rate have varied substantially in the past quarter century.