WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

Doris A. Oberdabernig, University of Innsbruck

The focus of this work is to measure the effects of Structural Adjustment Programmes (SAPs) of the International Monetary Fund (IMF) on poverty and income distribution. This study tries to estimate the impacts of SAPs on a variety of poverty indicators controlling for nonrandom selection. We make use of the matching method to test for differences in poverty indicators and GINI coefficients for countries participating in IMF agreements and countries which do not. Performing Heckman regressions we study the effects in more detail. We control for economic factors and include regional submodels to test for robustness. Propensity score matching does not show significant effects of SAPs on poverty indicators. Using Heckman regressions we find evidence that participation in IMF programmes is connected to higher poverty rates and a more unequal income distribution. These results stay robust after controlling for other economic variables.