Effects of IMF programs on school enrollment in developing countries

Abstract

The IMF is one of the most heavily criticized international financial institutions in the world and has been accused of having a negative effect on education. By using multi-level analyses, this paper estimates the effects of IMF supported programs on the growth in school enrollment in developing countries at the district level for girls and boys aged 9-11 and 12-14. Using data on 44 countries, containing 431 districts between 1997-2007, effects of IMF programs are measured in three ways. Effects are estimated for whether or not a country has an IMF program, followed by a comparison between short and long-term programs. The effects of different program characteristics are also estimated. Results indicate that short-term IMF programs have significant positive effects on the growth in school enrollment for girls and boys aged 9-11. These effects are more positive in more rural areas and in less developed regions. Labor market reforms are found to have strong negative significant effects for girls and boys in both age groups, with stronger effects in more urban and more developed districts. Policies to decrease the level of corruption, the level of public debt and increases in net international reserves have positive effects on the growth in schooling, with stronger effects for different interactions.