Abdou, Doaa M. Salman; El-Ahma , Ahmed Adel; Youss i, Dina; Klose, Jens
A icle
Deb apped: Analysing he impac o IMF on economic
g ow h and human de elopmen in highly indeb ed
coun ies, wi h a ocus on co up ion
Ekonomika
P o ided in Coope a ion wi h:
Vilnius Uni e si y P ess
Sugges ed Ci a ion: Abdou, Doaa M. Salman; El-Ahma , Ahmed Adel; Youss i, Dina; Klose, Jens
(2025) : Deb apped: Analysing he impac o IMF on economic g ow h and human de elopmen
in highly indeb ed coun ies, wi h a ocus on co up ion, Ekonomika, ISSN 2424-6166, Vilnius
Uni e si y P ess, Vilnius, Vol. 104, Iss. 1, pp. 30-47,
h ps://doi.o g/10.15388/Ekon.2025.104.1.2
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/323170
S anda d-Nu zungsbedingungen:
Die Dokumen e au EconS o dü en zu eigenen wissenscha lichen
Zwecken und zum P i a geb auch gespeiche und kopie we den.
Sie dü en die Dokumen e nich ü ö en liche ode komme zielle
Zwecke e iel äl igen, ö en lich auss ellen, ö en lich zugänglich
machen, e eiben ode ande wei ig nu zen.
So e n die Ve asse die Dokumen e un e Open-Con en -Lizenzen
(insbesonde e CC-Lizenzen) zu Ve ügung ges ell haben soll en,
gel en abweichend on diesen Nu zungsbedingungen die in de do
genann en Lizenz gewäh en Nu zungs ech e.
Te ms o use:
Documen s in EconS o may be sa ed and copied o you pe sonal
and schola ly pu poses.
You a e no o copy documen s o public o comme cial pu poses, o
exhibi he documen s publicly, o make hem publicly a ailable on he
in e ne , o o dis ibu e o o he wise use he documen s in public.
I he documen s ha e been made a ailable unde an Open Con en
Licence (especially C ea i e Commons Licences), you may exe cise
u he usage igh s as speci ied in he indica ed licence.
h ps://c ea i ecommons.o g/licenses/by/4.0/
30
Ekonomika ISSN 1392-1258 eISSN 2424-6166
2025, ol. 104(1), pp. 30–47 DOI: h ps://doi.o g/10.15388/Ekon.2025.104.1.2
Deb T apped: Analysing he Impac o
IMF on Economic G ow h and Human
De elopmen in Highly Indeb ed Coun ies,
wi h a Focus on Co up ion
Doaa M. Salman Abdou*
Oc obe Uni e si y o Mode n Sciences and A s, Cai o, Egyp
Email: [email p o ec ed]
ORCID: h ps://o cid.o g/0000-0001-5050-6104
Ahmed Adel El-Ahma
Oc obe Uni e si y o Mode n Sciences and A s, Cai o, Egyp
Email: [email p o ec ed]
ORCID: h ps://o cid.o g/0000-0002-9160-2001
Dina Youss i
Ge man Uni e si y, Cai o, Egyp
Email: [email p o ec ed]
ORCID: h ps://o cid.o g/0000-0003-3516-3865
Jens Klose
THM Business School, Giessen, Ge many
Email: [email p o ec ed]
ORCID: h ps://o cid.o g/0000-0001-6234-5272
Abs ac . Being indeb ed ep esen s signi ican isks associa ed wi h global inancial ins abili y in a wo ld
whe e inancial s abili y hangs p eca iously be ween deb and economic g ow h. The In e na ional Mone a y
Fund (IMF) cas s a c i ical eye o e coun ies na iga ing he pe ilous seas o iscal esponsibili y, aiming o
imp o e hei economic pe o mance. Hence, e alua ing he connec ion be ween IMF loans and sus ainable
g ow h in highly indeb ed coun ies is c ucial. This s udy aims o examine he impac o IMF loans on eal
GDP and human de elopmen in a panel o he 13 mos indeb ed coun ies om 1997 o 2020, by using pooled
OLS and ixed-e ec es ima o s. The a icle con ibu es o he exis ing li e a u e in wo ways. On he one hand,
a b oad se o human de elopmen indica o s is analysed. On he o he hand, co up ion is inco po a ed in o
he analysis, explici ly measu ing he simul aneous e ec s o IMF loans and co up ion. I has been ound
ha IMF loan g ow h ends o lowe GDP g ow h, human de elopmen , and mo ali y. IMF loans o en come
wi h condi ions ha may lead o aus e i y measu es. While hese measu es can nega i ely impac economic
g ow h in he sho e m, hey migh also edi ec esou ces owa d social p og ams which imp o e heal h
ou comes, he eby educing mo ali y a es. When co up ion is conside ed, a educ ion in co up ion leads o
mo e e ec i e IMF loans, inc eased human de elopmen , and dec eased mo ali y e en u he . The e o e, i
is ecommended ha IMF loans should always be accompanied wi h incen i es o educe co up ion.
Keywo ds: IMF loans, HDI, indeb ed coun ies, co up ion, economic g ow h, li e expec ancy, mo ali y, educa ion.
Recei ed: 17/09/2024. Re ised: 21/11/2024. Accep ed: 05/01/2025
Copy igh © 2025 Doaa M. Salman Abdou, Ahmed Adel El-Ahma , Dina Youss i, Jens Klose. Published by Vilnius Uni e si y P ess
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion License, which pe mi s un es ic ed use,
dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal au ho and sou ce a e c edi ed.
Con en s lis s a ailable a Vilnius Uni e si y P ess
* Co esponden au ho .
Doaa M. Salman Abdou e al. Deb T apped: Analysing he Impac o IMF on Economic G ow h and Human De elopmen ...
31
In oduc ion
Human de elopmen is widely ecognized as one o he key d i e s o a coun y’s economic
g ow h. Imp o ed educa ion and heal h lead o he acquisi ion o skills, pa icula ly he
abili y o inno a e, which can boos economic g ow h. Mo eo e , human de elopmen
enhances people’s choices and di e si ies hem in a way ha enables hem o lead longe ,
heal hie , and mo e ul illing li es. Gi en i s impo ance, he Uni ed Na ions has add essed
human de elopmen ex ensi ely in i s Sus ainable De elopmen Goals (SDGs), wi h se en
o he 17 goals ocusing on di e en aspec s o human de elopmen , such as educing
po e y, imp o ing heal h and educa ion, and p omo ing gende equali y. Howe e , mos
coun ies ail o de elop balanced deb managemen policies ha can help hem o achie e
g ow h e en i hey ecei e ex e nal assis ance om ins i u ions such as he In e na ional
Mone a y Fund (IMF) and he Wo ld Bank (Elkhal i e al., 2024).
The IMF plays a c i ical ole in de eloping coun ies, whe e co up ion can misdi ec
he use o IMF loans, wi h unds ge ing was ed on p ojec s ha do no ac ually bene i
he coun y. This s udy aims o examine he impac o IMF loans on economic g ow h
and human de elopmen in he mos indeb ed coun ies. Some schola s ha e exp essed
conce n ha he engagemen is a deb ap, a use owa ds mode n neo-coloniza ion and
esou ce ex inc ion in A ica. Howe e , o he s ha e documen ed he signi icance o such
in es men s in a aining SDGs (Bo e al., 2024)
This a icle ex ends p e ious esea ch in he li e a u e in wo ways. Fi s , i s a s wi h
measu ing he e ec s o IMF loans on a b oad se o dependen a iables. These a e, on
he one hand, he eal GDP g ow h as he common p oxy o economic g ow h, and, on
he o he hand, he Human De elopmen Index (HDI), seconda y school en ollmen , li e
expec ancy, and mo ali y a e, which a e used o measu e human de elopmen . Second,
a new dimension is added o he li e a u e by adding co up ion o he analysis. Wi h
his ac o being conside ed, we can e i y whe he IMF loans ha e di e en e ec s in
high- and low-co up ion economies. This s udy ocuses on he ansmission channels and
discusses a ious ac o s ha migh media e he indeb edness-mo ali y link. Fo example,
we no e ha highe le els o deb accumula ion esul in inc eased aus e i y. The ollowing
sec ion discusses he li e a u e e iew, ollowed by an o e iew o he da a used. Finally,
he esul s, conclusion and policy ecommenda ions a e ou lined.
Li e a u e Re iew
The classical school, in con as wi h Keynesian economis s, belie ed in he Go e nmen ’s
ole in egula ing he ma ke and co ec ing imbalances h ough public bo owing as pa
o Go e nmen in e en ion in he economy o ensu e upwa d economic e olu ion. They
belie ed ha accumula ion o deb led o a c owding-ou e ec , he eby dec easing p i a e
in es men s, which de e io a ed economic g ow h. The Deb O e hang Theo y, es ablished
by K ugman in 1988, explains he si ua ion in which he accumula ed loans and deb
make he coun y unable o epay hem, hus dec easing i s expendi u e abili y on public
ISSN 1392-1258 eISSN 2424-6166 Ekonomika. 2024, ol. 104(1)
32
p ojec s such as in as uc u e, social p og ams, o inancing he ecu en expendi u e. In
1964, Ga y Becke explo ed how educa ion and aining con ibu e o economic success,
and explained why de eloped coun ies accumula e weal h while de eloping coun ies
emain poo due o labou (unde )p oduc i i y. The model s a es ha a highe in es men
in capi al pe wo ke leads o a highe ou pu , wi h in es men pe wo ke being he main
a iable posi i ely impac ing changes in capi al pe wo ke . The e o e, deb should be
di ec ed o inance educa ion, imp o e in as uc u e, and de elop heal hca e se ices so
ha o imp o e human capi al and echnology, which a e conside ed he main sou ces o
he coun y’s u u e income gene a ion.
The e ec i eness o IMF p og ams and loans on he coun ies ecei ing help has al-
eady been in es iga ed ex ensi ely. This also holds, among o he poin s, o he empi ical
esponse o economic g ow h and human de elopmen . Ba o and Lee (2005) ound ha
IMF loans educe economic g ow h a es in hei sample o 130 coun ies be ween 1975
and 1999. Meanwhile, Bi d and Rowlands (2017) disco e ed ha he impac o IMF loan
p og ams on economic g ow h in low-income coun ies is gene ally posi i e, howe e , i
depends on he coun y’s pe o mance, deb and aid dependency, IMF esou ces, and he
ecen his o y o IMF engagemen . La e , Hackle e al. (2020) es ima ed empi ically o
93 coun ies be ween 2000 and 2014 wha e ec s he compliance o IMF loan condi ions
ends o ha e on economic g ow h. The au ho s es ablished ha mee ing he IMF condi ions
can change he economic g ow h a e ei he way depending on he na u e o he condi ion.
Siddique e al. (2021), by using panel da a co e ing 70 coun ies du ing he pe iod
o 1980–2018, de e mined ha IMF loans had a posi i e impac on economic g ow h o
uppe -middle-income coun ies. Ku uc (2022) used a syn he ic con ol analysis o IMF
in e en ions in 399 di e en c isis pe iods be ween 1970 and 2013. Wi h his app oach,
he could show ha IMF p og ams led o highe economic g ow h han in a si ua ion
wi hou a p og am in place.
Ano he s and o li e a u e ocuses on he ole o IMF p og ams o human de elop-
men . Eas e ly (2003), by using da a om 1980 o 1998, es ablished ha IMF and Wo ld
Bank p og ams ha e no signi ican di ec e ec on po e y a es. Howe e , he ound ha
he g ow h elas ici y o po e y is signi ican ly nega i e, which means ha he poo segmen
o he popula ion bene i s less om economic expansion unde a p og am. Muhamed and
Gaas (2016) disco e ed ha IMF p og ams had a nega i e impac on human de elopmen
in de eloping coun ies. Bi d e al. (2021) de e mined ha IMF p og ams did no signi -
ican ly inc ease po e y o income inequali y by using a sample o 48 coun ies in he
yea s anging om 1990 o 2015. S ubbs e al. (2021) ocused on he aus e i y policies
o en associa ed wi h IMF p og ams and hei e ec s on po e y and income inequali y.
In a sample co e ing 79 coun ies be ween 2002 and 2018, hey asce ained ha s ic e
aus e i y policies in IMF p og ams led o mo e po e y and highe income inequali y.
Biglaise and McGau an (2022) ound ha IMF loans educe human de elopmen
in de eloping coun ies in a sample o 81 coun ies be ween 1986 and 2016. This esul
holds in pa icula ly conce ning poo na ions. Co up ion is a ac o ha may a ec he
e ec i eness o IMF loans and is associa ed wi h lowe g ow h and mo e po e y. A
Doaa M. Salman Abdou e al. Deb T apped: Analysing he Impac o IMF on Economic G ow h and Human De elopmen ...
33
ecen s and o he li e a u e emphasizes he impo ance o e-go e nmen in comba ing
co up ion and p omo ing anspa ency (Seiam and Salman, 2024). Apeagyei e al. (2024)
showed ha many sub-Saha an A ican coun ies su e om po e y and income ine-
quali y, de e io a ing public heal h, educa ional ou comes, inc easing child mo ali y, and
co up ion. The IMF p o ides inancial assis ance o coun ies acing balance o paymen s
p oblems, and nume ous sub-Saha an na ions ha e engaged wi h he IMF h ough a ious
lending p og ams.
This s udy con ibu es o he ongoing discussion on he e ec i eness o IMF loans.
Fi s , we a e one o he ew s udies ha es ima e he e ec s o IMF loans on economic
g ow h and human de elopmen simul aneously. Second, o he bes o he esea che s’
knowledge, hey a e he i s o in es iga e he ole o co up ion in IMF p og ams and
hei e ec on g ow h and de elopmen . Thi d, we ocus on a unique da abase wi h 13
highly indeb ed coun ies in he yea s anging be ween 1997 and 2020. The s udy’s main
hypo heses a e:
• IMF loans end o lowe he GDP g ow h and human de elopmen (e.g., li e expec-
ancy, educa ion) in he sho e m.
• The e ec i eness o IMF loans imp o es when co up ion is educed, hus leading
o enhanced human de elopmen and dec eased mo ali y.
Me hodology and Da a
Ou panel da ase is comp ised o 13 coun ies which ecei ed IMF loans du ing he pe-
iod om 1997 o 2020. These coun ies a e Angola, A gen ina, Ecuado , Egyp , Ghana,
I o y Coas , Kenya, Mo occo, Nige ia, Pakis an, Sou h A ica, Tunisia, and Uk aine.
Fo each o hese coun ies, we ga he ed da a on i e dependen a iables, ep esen ing
measu es o ei he economic g ow h o human de elopmen . Economic g ow h is ap-
p oxima ed by he eal g oss domes ic p oduc (GDP). Addi ionally, we inco po a ed wo
o he h ee sub-indices used in he HDI calcula ion. Thus, he second measu e ep esen s
he sha e o seconda y school en ollmen , while he hi d measu e ep esen s li e expec-
ancy. The ou h measu e is he mo ali y a e, which is expec ed o nega i ely co ela e
wi h li e expec ancy.
As o independen a iables, we collec ed da a on he wo p ima y a iables o in e es :
he amoun o money ecei ed h ough IMF loans, and he coun y’s co up ion index. Fo
he co up ion index, we u ilized he Co up ion Pe cep ion Index issued by T anspa ency
In e na ional1. I is o impo ance o no e ha an inc ease in his index indica es a educ-
ion in co up ion wi hin he coun y. Fu he mo e, we included a se o six addi ional
con ol a iables in all he es ima ion equa ions. These include G oss capi al o ma ion
(GCF), Go e nmen expendi u es on educa ion (as a pe cen age o he o al Go e nmen
expendi u es), ade in se ices, consume p ice index, o eign di ec in es men s (FDI),
and he size o he popula ion. To ensu e he s a iona i y o he unde lying ime-se ies
1 h ps://www. anspa ency.o g/en/cpi/2022
ISSN 1392-1258 eISSN 2424-6166 Ekonomika. 2024, ol. 104(1)
34
da a, all he a iables we e ans o med in o g ow h a es. Fo example, he p ice index
was ans o med in o he in la ion a e. Desc ip i e s a is ics along wi h uni oo es s o
all a iables a e p esen ed in Table 1 in he Appendix.
Co ela ion Analysis
The analysis e eals a s ong posi i e co ela ion be ween IMF loans and GDP in he
s udied coun ies, he eby indica ing ha as IMF loans inc ease, GDP also ises. The e
a e se e al o he signi ican co ela ions: a weak nega i e co ela ion exis s be ween he
mo ali y a e and bo h IMF loans and co up ion. Seconda y school en ollmen shows
a weak posi i e co ela ion wi h GDP, IMF loans, and co up ion, along wi h a s ong
nega i e co ela ion wi h he mo ali y a e. Human de elopmen exhibi s a weak posi i e
co ela ion wi h GDP, IMF loans, and co up ion, bu s ong nega i e co ela ions wi h he
mo ali y a e and posi i e co ela ions wi h seconda y school en ollmen . Go e nmen
expendi u e on educa ion has weak nega i e co ela ions wi h GDP and IMF loans, bu
weak posi i e co ela ions wi h co up ion, mo ali y, seconda y school en ollmen , and
human de elopmen . In la ion nega i ely co ela es wi h GDP, co up ion, seconda y
school en ollmen , and human de elopmen . Fo eign di ec in es men (FDI) shows weak
nega i e co ela ions wi h GDP, IMF loans, seconda y school en ollmen , and human
de elopmen , while s ongly co ela ing posi i ely wi h in la ion. G oss capi al o ma ion
has weak nega i e co ela ions wi h GDP and IMF loans, and ade in se ices nega i ely
co ela es wi h GDP. Popula ion g ow h is weakly nega i ely co ela ed wi h GDP, IMF
loans, co up ion, seconda y school en ollmen , and Go e nmen expendi u e. Fo de ailed
co ela ions, e e o Table 2 in he Appendix.
Es ima ion Me hodology
The s udy used a c oss-dependence es o de e mine he sui abili y o pooled e sus
andom e ec s models. The model includes i e dependen a iables, and employs wo
es ima ion me hods: pooled o dina y leas squa es (OLS), assuming a common in e cep
o all he coun ies unde analysis, and ixed-e ec s es ima ion, allowing o indi idual
coun y in e cep s. De ailed indings a e p esen ed in Tables 3 o 7 in he Appendix. Two
di e en ypes o es ima ion a e employed: i s , a pooled o dina y leas squa es (OLS)
es ima ion, which assumes ha all coun ies ha e he same in e cep (see Equa ion (1));
and second, a ixed-e ec s es ima ion, which allows each coun y o ha e an indi idual
in e cep (see Equa ion (2)).
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(1)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(2)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(3)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(4)
(1)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(1)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(2)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(3)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(4)
(2)
In bo h equa ions, he index i signals he coun y and s ands o he ime pe iod
(yea s in ou case). y deno es one o he i e dependen a iables (GDP, HDI, School,
Doaa M. Salman Abdou e al. Deb T apped: Analysing he Impac o IMF on Economic G ow h and Human De elopmen ...
35
Li e, o Mo ali y). α ep esen s he common o indi idual in e cep , while β1 and γx a e
he coe icien s o IMF loans and he con ol a iables (GCF, Educa ion, T ade, P ice,
FDI and Popula ion), espec i ely. I should be no ed ha x anges om 1 o 6 in line wi h
he esponses o be es ima ed o each o he six con ol a iables. Finally, εi measu es
he e o e m.
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(1)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(2)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(3)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(4)
(3)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(1)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(2)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼 + 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(3)
𝑦𝑦𝑖𝑖𝑖𝑖 = 𝛼𝛼𝑖𝑖+ 𝛽𝛽1𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 + 𝛽𝛽2𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛽𝛽3𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖𝑖𝑖 ∙𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝐶𝑖𝑖𝑖𝑖 + 𝛾𝛾𝑥𝑥𝑍𝑍𝑖𝑖𝑖𝑖 + 𝜀𝜀𝑖𝑖𝑖𝑖
(4)
(4)
In Equa ions (1) and (2), he e ec o co up ion is no included. This is delibe a e o
i s demons a e he o e all e ec s o IMF loans on he dependen a iables. In a sub-
sequen s ep, howe e , we inco po a e co up ion. This is done in wo ways: i s ly, by
adding co up ion as an addi ional eg esso . Secondly, by adding he p oduc o IMF and
co up ion, we demons a e how he dependen a iable changes conce ning IMF loans
and changes in co up ion. Equa ions (3) and (4) depic hese adjus ed speci ica ions using
pooled OLS and ixed-e ec s, espec i ely.
Resul s
This sec ion p esen s and discusses he empi ical esul s. I begins wi h he speci ica ions
ha do no conside he in luence o co up ion, as ou lined in Equa ions (1) and (2). The
esul s a e p esen ed in Table 8.
The esponse o GDP g ow h was ound o be signi ican ly nega i e in bo h speci i-
ca ions (2.1 and 2.2), al hough he e ec ends o be small. This sugges s ha an inc ease
in IMF loans is associa ed wi h lowe economic g ow h in he sho e m, possibly due o
he s ingen e o m packages ypically associa ed wi h IMF suppo . This inding ein-
o ces he esul s o p e ious s udies by Ba o and Lee (2005). Howe e , he e a e h ee
excep ions wo h no ing. Fi s ly, g oss capi al o ma ion shows a posi i e and signi ican
e ec on economic g ow h. A one pe cen inc ease in g oss capi al o ma ion leads o an
inc ease o 0.15% in economic g ow h. This esul is logical as g oss capi al o ma ion
is a componen o GDP. Secondly, GDP g ow h eac s nega i ely o an inc ease in he
p ice index, he eby indica ing ha highe in la ion a es educe economic g ow h, wi h
e e y hing else being equal. This esul is expec ed as inc eased p ices diminish p oduc
demand. Thi dly, popula ion g ow h appea s o posi i ely in luence economic g ow h,
as expec ed, hus indica ing ha coun ies wi h la ge popula ions end o p oduce mo e
goods and se ices.
Conce ning he esponse o HDI g ow h (2.3 and 2.4), he esul s sugges a weakly neg-
a i e e ec o IMF loan g ow h on HDI g ow h, which becomes signi ican in he pooled
OLS Equa ion (2.3). This implies ha , a leas in he sho e m, IMF loans and he aus e i y
p og ams o en associa ed wi h hem end o educe human de elopmen . This inding is
consis en wi h p e ious s udies by Muhamed and Gaas (2016) and Biglaise and McGau-
an (2022). The con ol a iables end o be p edominan ly signi ican in hese speci i-
ISSN 1392-1258 eISSN 2424-6166 Ekonomika. 2024, ol. 104(1)
36
Table 8. Baseline esul s
GDP HDI School Li e Mo ali y
(2.1) (2.2) (2.3) (2.4) (2.5) (2.6) (2.7) (2.8) (2.9) (2.10)
Pooled OLS Fixed e ec s Pooled OLS Fixed e ec s Pooled OLS Fixed e ec s Pooled OLS Fixed e ec s Pooled OLS Fixed e ec s
IMF -0.004**
(0.002)
-0.003**
(0.002)
-0.001*
(0.000)
-0.001
(0.000)
0.001
(0.007)
0.003
(0.007)
0.000
(0.000)
0.000
(0.000)
-0.002**
(0.001)
-0.001**
(0.001)
GCF 0.150***
(0.015)
0.147***
(0.015)
0.013***
(0.004)
0.014***
(0.003)
0.099*
(0.060)
0.117*
(0.061)
0.002
(0.002)
0.002
(0.002)
-0.000
(0.007)
-0.004
(0.006)
Educa ion 0.006
(0.015)
0.002
(0.015)
0.008**
(0.004)
0.007**
(0.003)
-0.112*
(0.062)
-0.121*
(0.063)
-0.000
(0.002)
0.000
(0.002)
-0.001
(0.007)
0.002
(0.006)
T ade 0.011
(0.012)
0.010
(0.012)
0.008***
(0.003)
0.009***
(0.003)
0.091*
(0.049)
0.103**
(0.050)
0.001
(0.002)
0.002
(0.002)
-0.001
(0.006)
-0.001
(0.005)
P ice -0.022*
(0.013)
-0.029**
(0.015)
0.006**
(0.003)
0.005
(0.003)
-0.078
(0.050)
-0.122**
(0.059)
0.000
(0.002)
-0.000
(0.002)
-0.007
(0.006)
0.001
(0.006)
FDI 0.001
(0.001)
0.001
(0.001)
0.000
(0.000)
-0.000
(0.000)
-0.008**
(0.003)
-0.009***
(0.003)
0.000
(0.000)
-0.000
(0.000)
-0.000
(0.000)
0.000
(0.000)
Popula ion 0.633***
(0.202)
-0.937
(0.789)
0.296***
(0.049)
0.597***
(0.177)
2.417**
(0.941)
7.486*
(4.22)
0.274***
(0.031)
0.443***
(0.106)
0.143
(0.096)
-0.713**
(0.328)
C2.152***
(0.411)
0.340***
(0.100)
-2.300
(1.774)
0.117*
(0.065)
-3.658***
(0.194)
Adj. R² 0.382 0.400 0.266 0.396 0.067 0.053 0.241 0.475 0.006 0.256
N249 249 249 249 189 189 249 249 249 249
No es. C s ands o he cons an (only o pooled OLS. Fixed e ec s cons an s a e a ailable om he au ho s upon eques ), N deno es he numbe o obse a ions,
whe eas Adj. R² is he adjus ed R² alue. All o he abb e ia ions a e explained in he main ex . S anda d e o s a e gi en in pa en heses, ***/**/* s ands o he sig-
ni icance o he coe icien s a 99%, 95% and 90% le els, espec i ely.
Doaa M. Salman Abdou e al. Deb T apped: Analysing he Impac o IMF on Economic G ow h and Human De elopmen ...
37
ca ions. G oss capi al o ma ion (GCF) g ow h exhibi s a obus posi i e e ec on HDI
g ow h, which is easonable as in es men s may occu in sec o s ha enhance human de-
elopmen , such as educa ion o heal hca e. Unsu p isingly, he esponse o HDI g ow h o
he Go e nmen ’s schooling expendi u e inc eases is signi ican ly posi i e, as his di ec -
ly con ibu es o human de elopmen . Addi ionally, inc easing in e na ional ade g ow h
was ound o inc ease HDI g ow h, likely due o he b oade ange o goods and se ices
a ailable ia impo s, which can imp o e access o i ems such as medica ion. In e es ingly,
he in la ion a e ini ially appea s o ha e a signi ican ly posi i e e ec on HDI g ow h
in he pooled OLS Equa ion (2.3). This esul is puzzling, as one migh expec a nega-
i e esponse, gi en ha highe in la ion a es could de e in es men s aimed a imp o ing
human de elopmen . Howe e , he signi icance diminishes once ixed e ec s ha e been
inco po a ed in o he es ima ion (2.4). Finally, acco ding o he esul s, human de elop-
men g ow h inc eases wi h popula ion g ow h. One possible explana ion o his is ha
an inc easing popula ion necessi a es he de elopmen o c i ical in as uc u e, leading o
imp o emen s in heal hca e and educa ion sys ems.
When examining he i s ac o con ibu ing o HDI, which is School g ow h, we ind
ha g ow h in IMF loans ends o ha e no e ec (3.5 and 3.6). This sugges s ha , in he
sho e m, an IMF c edi does no signi ican ly con ibu e o he de elopmen o imp o e-
men o he schooling sys em. This inding aligns wi h he expec a ions, as es ablishing o
enhancing a schooling sys em is ypically a medium- o long- e m endea ou . Rega ding
he con ol a iables, we obse e simila signi ican ly posi i e eac ions o school g ow h
as we ound conce ning HDI g ow h o a iables such as g oss capi al o ma ion (GCF),
ade, and popula ion g ow h. Thus, i can be in e ed ha HDI g ow h, pa icula ly in
e ms o school g ow h, is pa ly d i en by hese ac o s. Mo eo e , we now ind ha he
esponse o school g ow h o he in la ion a e has he expec ed signi ican ly nega i e
impac , as highe p ices end o discou age in es men s in he schooling sys em. Howe e ,
he esul ega ding Go e nmen expendi u es on educa ion is puzzling, as i is ound o
ha e a signi ican ly nega i e e ec on school g ow h. One possible explana ion is ha
he e ec s o hese expendi u e inc eases do no ma e ialize immedia ely, and may e en
hinde schooling imp o emen due o ac o s such as eno a ions o school buildings.
Las ly, we ind a signi ican ly nega i e e ec o o eign di ec in es men (FDI) g ow h
on school g ow h. One explana ion o his could be ha , in many o he coun ies unde
in es iga ion, which a e p edominan ly low-income coun ies, FDI in es men s a e mainly
di ec ed owa ds sec o s equi ing unskilled labou . Consequen ly, an inc ease in FDI may
lead o a g ea e demand o unskilled wo ke s, hus p omp ing indi iduals o o go o
educe hei educa ion. When examining he e ec s on g ow h in li e expec ancy, he esul s
a e p esen ed in columns 2.7 and 2.8 o Table 8. Finally, when examining he esponse
o mo ali y g ow h (2.9 and 2.10), we ind he expec ed signi ican ly nega i e esponse,
which co esponds o he signi ican ly posi i e e ec we ound ega ding g ow h in li e
expec ancy. This sugges s ha , as he popula ion g ows, mo ali y a es end o dec ease,
which is consis en wi h he no ion ha la ge popula ions may lead o an imp o ed access
o heal hca e and o he li e-sa ing esou ces.
ISSN 1392-1258 eISSN 2424-6166 Ekonomika. 2024, ol. 104(1)
44
Robe s, R. O. (1942). Rica do’s heo y o public deb s. Economica, 9(35), 257–266. h ps://doi.
o g/10.2307/2549539
Siddique, I., Haya , M., Naeem, M., Ejaz, A., Spulba , C., Bi au, R., and Caluga u, T. (2021). Why Do Coun-
ies Reques Assis ance om In e na ional Mone a y Fund? An Empi ical Analysis. Jou nal o Risk and
Financial Managemen . h ps://doi.o g/10.3390/j m14030098
Seiam, D. A., & Salman, D. (2024). Examining he global in luence o e-go e nance on co up ion: a panel
da a analysis. Fu u e Business Jou nal, 10(1), 29. h ps://doi.o g/10.1186/s43093-024-00319-3
S ubbs, T., Ken ikelenis, A., Ray, R. and, Gallaghe , K. P. (2022). Po e y, Inequali y, and he In e na ional
Mone a y Fund: How Aus e i y Hu s he Poo and Widens Inequali y. Jou nal o Globaliza ion and
De elopmen , 13(1), 61–89. h ps://doi.o g/10.1515/jgd-2021-0018
Doaa M. Salman Abdou e al. Deb T apped: Analysing he Impac o IMF on Economic G ow h and Human De elopmen ...
45
Appendix
Table 1. Desc ip i e s a is ics and uni oo es s
GDP
HDI
School
Li e
Mo ali y
IMF
Co up ion
GCF
Educa ion
T ade
P ice
FDI
Popula ion
Desc ip i e S a is ics
Mean 3.51 0.90 1.47 0.53 -3.38 34.26 -0.62 3.50 0.32 4.24 13.29 33.04 1.80
Maximum 15.33 4.40 128.27 2.49 2.07 985.04 0.64 57.12 97.03 186.45 325.00 2873.16 3.76
Minimum -15.14 -3.82 -33.33 -2.01 -10.70 -95.20 -1.50 -47.12 -67.71 -55.80 -1.20 -2182.55 -1.05
S anda d
De ia ion 4.10 0.95 11.04 0.65 1.61 132.20 0.46 14.65 13.81 21.43 7.01 304.87 1.04
Panel Uni Roo Tes s
Le in e
al. (2002)
-3.90
(0.00)
-3.95
(0.00)
-8.09
(0.00)
-7.03
(0.00)
-2.32
(0.01)
-9.81
(0.00)
-2.40
(0.01)
-9.44
(0.00)
-11.64
(0.00)
-10.48
(0.00)
-2.81
(0.01)
-10.72
(0.00)
-1.68
(0.05)
No es. Panel uni oo es es ing o a common uni oo as in oduced by Le in e al. (2002). Fo he uni oo
es s, we show he co esponding p- alues in pa en heses.
Table 2. Pai wise co ela ion
Va iables (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
(1) GDP 1
(2) IMF 0.501* 1
(3) Co 0.037 -0.104 1
(4) Mo ali y -0.175* -0.205* -0.493* 1
(5) School 0.287* 0.129* 0.207* -0.587* 1
(6) HDI 0.382* 0.310* 0.443* -0.880* 0.604* 1
(7) GEI -0.188* -0.058 0.398* -0.475* 0.273* 0.383* 1
(8) p ice -0.187* -0.068 -0.209* 0.361* -0.119* -0.235* -0.043 1
(10) FDI -0.172* -0.115* 0.130* 0.136* -0.015 -0.080 0.189* 0.560* 1
(11) GCF -0.281* -0.361* -0.059 0.086 0.045 -0.102 0.068 0.120* 0.147* 1
(12) T ade -0.511* -0.205* -0.029 0.032 -0.062 -0.127* 0.221* 0.403* 0.440* 0.289* 1
(13) POP -0.207* -0.298* -0.377* 0.713* -0.336* -0.712* -0.381* 0.220* -0.011 0.109 0.023 1
Sou ce: based on he au ho ’s calcula ions
ISSN 1392-1258 eISSN 2424-6166 Ekonomika. 2024, ol. 104(1)
46
Table 3. C oss dependence es
RGDP [Coun yID, ] = Xb + u[Coun yID] + e[Coun yID, ]
Es ima ed esul s:
| Va sd = sq (Va )
---------+-----------------------------
logReal~P | .7390468 .8596783
VIF 1/VIF
FDI 1.699 .589
INF 1.695 .59
TISI 1.459 .686
POP 1.369 .731
GEI 1.321 .757
LIMFL 1.229 .814
GCFI 1.168 .856
Mean VIF 1.42 .
e | .0247097 .1571933
u | 1.502486 1.225759
Tes : Va (u) = 0
chiba 2(01) = 1708.87
P ob > chiba 2 = 0.0000
Table 4. Hausman Tes
Hausman (1978) speci ica ion es
Coe .
Chi-squa e es alue 2.33
P- alue .969
Table 5. No mali y Tes
Ja que-Be a no mali y es : 28.59 Chi(2) 6.2e-07
Ja que-Be a es o Ho: no mali y:
Table 6. VIF Tes
VIF 1/VIF
FDI 1.699 .589
INF 1.695 .59
TISI 1.459 .686
POP 1.369 .731
GEI 1.321 .757
LIMFL 1.229 .814
GCFI 1.168 .856
Mean VIF 1.42 .
Doaa M. Salman Abdou e al. Deb T apped: Analysing he Impac o IMF on Economic G ow h and Human De elopmen ...
47
Table 7. B eusch-Pagan o He e oscedas ici y
B eusch-Pagan / Cook-Weisbe g es o he e oscedas ici y
Ho: Cons an a iance
Va iables: i ed alues o LRGDP
chi2(1) = 0.09
P ob > chi2 = 0.76
