Abstract

Using panel data for six Middle East and North African (MENA) countries over the period of 1975 to 2004, this paper analyzes macroeconomic effects of IMF programs. Consistent with the results of previous studies, it is shown that IMF programs have positive effect on balance of payments. However, these programs have negative impacts on investment, inflation and consumption. It is also found that these programs have no effect on the per capita GDP, current account, budget deficits and foreign direct investments in the selected MENA countries. The results suggest that, on average, when a country starts with a balance of payments crisis and IMF involvement enables it to overcome it, this is making macroeconomic situation worse.

Key words: IMF, MENA, stabilization programs.