Abstract:
This thesis explores the complex interplay between International Monetary Fund (IMF) interventions
and their economic impacts on countries in the Middle East and North Africa
(MENA) region. Through an in-depth analysis of several MENA countries that have engaged
with the IMF, this research aims to dissect the effects of IMF programs and political stability
on economic growth, social welfare, paying close attention to the outcomes of program
conditionality.
Employing a methodological approach that integrates descriptive statistics and econometric
models like OLS, the study meticulously analyzes macroeconomic variables before and
after IMF loan interventions. It also addresses the critical issue of self-selection bias by using
polity indices as instrumental variables, ensuring a nuanced understanding of the IMF’s
impact. The data, sourced from the IMF and the World Economic Outlook database, and
PolityV website encompasses a range of economic indicators for seven countries within the
MENA region that have received IMF loans.
The thesis contributes to the academic discourse on international finance and economic
development by offering evidence-based policy recommendations aimed at enhancing the effectiveness of future IMF programs in the MENA region. It navigates the complexities of IMF
engagements, examining both the benefits and the challenges, and seeks to provide a comprehensive
overview of the multifaceted relationship between IMF loans and the socio-economic
dynamics within MENA. By doing so, it aspires to guide international financial institutions,
governments, and policymakers towards informed decision-making that aligns with long-term
development objectives, fostering sustainable growth while minimizing adverse effects. Additionally,
it aims to clear up the confusion around whether IMF loans are inherently bad for
countries, providing a balanced perspective on their impact.
