This Working Paper is one of a series of drafts for a study currently under preparation at ODI with the provisional title of The IMF and Developing Countries: Its Role in the 1990s. The completed report will review developments in the 1980s; examine the Fund as a source of finance and issues in its lending policies; review the theory and practice of IMF policy conditionality and of heterodox alternatives to it; and explore the future role of the Fund.

The appropriateness and effects of the stabilisation programmes associated with the IMF has been controversial at times. This paper investigates the issue in two ways. Part I surveys the present state of the literature which applies quantitative tests to this issue, arguing that we can deduce from it more about programme effects than is sometimes suggested. Parts II and III present the results of new research which throws additional light on programme impact.