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This paper assesses the impact of information asymmetries on developing country financing and considers alternative techniques to reduce the adverse implications of such asymmetries. Following an introduction, Section II examines in general terms the role of information in financial markets and analyzes the incentive and risk sharing properties of alternative financial contracts. Information asymmetries which are present in domestic finance are more prevalent in international finance, in particular in developing country financing. Section III reviews measures aiming to resolve information asymmetries. Borrowing and creditor country regulations and policies, as well as innovative contractual agreements help to resolve a range of issues related to information asymmetries. However, despite their contribution, residual problems remain unresolved. The international financial institutions, and in particular the Fund, have an important role to play in alleviating information asymmetries.

Balance of payments --- Banks --- Capital flows --- Capital movements --- Consumption --- Criteria for Decision-Making under Risk and Uncertainty --- Depository Institutions --- Economics --- Exports and Imports --- Finance --- Finance: General --- Financial institutions --- Financial Instruments --- Financial risk management --- Financial sector policy and analysis --- General Financial Markets: Government Policy and Regulation --- Industries: Financial Services --- Institutional Investors --- International economics --- International Financial Markets --- International Investment --- International Lending and Debt Problems --- International Monetary Arrangements and Institutions --- Investment & securities --- Investments: Stocks --- Loans --- Long-term Capital Movements --- Macroeconomics --- Macroeconomics: Consumption --- Micro Finance Institutions --- Moral hazard --- Mortgages --- National accounts --- Non-bank Financial Institutions --- Pension Funds --- Public finance & taxation --- Saving --- Stocks --- Tax incentives --- Taxation --- Taxation, Subsidies, and Revenue: General --- Wealth --- Argentina

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This paper assesses the implementation of IMF-supported programs using measures of program interruptions, compliance with conditionality, and the share of committed funds disbursed. The econometric model allows an evaluation of the importance for program implementation of political conditions in borrowing countries, IMF effort, conditionality, as well as initial and external conditions. The paper concludes that program implementation depends primarily on borrowing countries' domestic political economy. Strong special interests, political instability, inefficient bureaucracies, lack of political cohesion, and ethno-linguistic divisions weaken program implementation. IMF effort, the extent and structure of conditionality, and initial and external conditions do not materially influence program prospects.

Inflation --- Public Finance --- Industries: Financial Services --- Political Economy --- Econometrics --- Economic Development --- Policy Objectives --- Policy Designs and Consistency --- Policy Coordination --- International Monetary Arrangements and Institutions --- International Lending and Debt Problems --- National Government Expenditures and Related Policies: General --- Price Level --- Deflation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Econometric and Statistical Methods: General --- Econometric Modeling: General --- Political economy --- Public finance & taxation --- Macroeconomics --- Finance --- Econometrics & economic statistics --- Development economics & emerging economies --- Public expenditure review --- Loans --- Expenditure --- Prices --- Financial institutions --- Econometric analysis --- Econometric models --- Economics --- Expenditures, Public --- United States