Abstract:In a recent IPC One pager, Terry McKinley asks why Africa is being constrained in spending aid (IPC OP No. 34, 2007). He implicates “restrictive, inflation-focused monetary policies” sponsored by the IMF as the primary agent blocking fiscal expansion. I agree that the IMF has been overly conservative in formulating fiscal strategy in many programmes with low income countries. However, the core of the problem is not inflation targets. The main issue is the implicit assumptions the IMF makes—often without much supporting evidence—about how the real economy will respond to changes in fiscal deficits and public spending. (...)

Keywords:Poverty, IMF, AID, MDG
Publication Date:
Type/Issue:One Pager/35
ISSN:2318-9118

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