International monetary fund involvement in lower income countries: Helpful or hurtful?

Abstract

Are countries better or worse off economically after receiving IMG loans? Critics of this organization argue that its loans are harmful to countries in a variety of ways. The ways they argue its involvement is harmful in a variety of ways. The ways they argue its involvement is harmful include, most notably, the critiques of the debt spiral and conditionality. Proponents counter that the IMF accomplishes its goals of international economic stability through economic maintenance for lower income countries, which helps the countries in the long term (about 5 or more years out). This paper examines the IMF's loans in several countries, ranging from low to high income from 1996-2020 and analyzes whether countries that received larger IMF loans were better off economically. I find that IMF loans create a "sugar rush" in countries, giving them momentary help and momentary relief, but contrary to the belief of proponents, not providing as much help in the long term.