Abstract
Does the involvement of the IMF and World Bank in developing countries and countries in transition help them to attract capital from other sources? Do the multilateral institutions exert a catalytic effect? While there is a strong body of opinion that claims that they do, the catalytic effect has been under-researched. This paper briefly reports the results from a research project financed by the UK Department for International Development. It examines the theory behind catalysis and also investigates the empirical evidence relating to it, drawing on qualitative research, regression analysis based on a large sample of developing countries, and systematic case studies. The analysis shows how the catalytic effect is nuanced and complex but that overall it is weak. The catalyzing role of the IMF and the World Bank remains potentially important, however, and the paper assesses ways in which it may be strengthened. Reforms are discussed in the context of the debate over a new international financial architecture. Copyright (C) 2000 John Wiley and Sons, Ltd.