Do the multilaterals catalyse other capital flows? A case study analysis

A commonly-held view is that lending by the multilaterals (the IMF and the World Bank) catalyses others to lend, including private capital markets and official bilateral aid donors, To the extent that this view influences ref orm of the multilaterals, it is important to know whether it is right or wr ong. While there is a growing amount of aggregate econometric evidence that calls into question the existence of the catalytic effect, there is always the possibility that more disaggregated and country-specific research coul d reveal nuances that are concealed by large-scale empirical work. This pap er attempts to fill this gap by systematically examining the case study evi dence relating to 17 developing countries non countries irt transition. The overall conclusion is that it is difficult to find support for positive ca talysis. Combined with other evidence, this mises fundamental doubts about the current direction of international financial reform.