chapter  8
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This study took as its point of departure that aggregate models and quantified macroeconomic projections are indispensable tools in helping governments concerned with economic management and development planning. Moreover, when use is made of foreign finance in support of economic restructuring, recipient third world governments will have to relate to influential international financing institutions, including in particular the IMF and the World Bank. The two Bretton Woods organizations use a variety of analytical tools in their country economic work. Yet relatively little has been published on the Financial Programming (FP) and Revised Minimum Standard Modelling (RMSM) frameworks. This is so even though they have over the years been the two most common macroeconomic modelling frameworks used by IMF and World Bank staff in producing macro projections. This is unfortu­ nate. The influence of the IMF and the World Bank over domestic policy making has increased considerably in developing countries. At the same time, it would appear that the relationship between the Bretton Woods institutions and the African countries, in particular, has not been an entirely happy one during the 1980s and early 1990s. There are many reasons for this (Tarp, 1993a), but the lack of transparency and capacity to elaborate independent macroeco­ nomic projections has no doubt played a critical role in this process. Putting the FP and RMSM analytical models squarely into the public domain in a practical and easily replicable manner as done in this book is therefore an attempt to help students of development and practitioners involved in country economic ana­ lyses to come to grips with the fundamental perceptions of macroeconomic causality that are often implicit in the economic policy advice given by the IMF and the World Bank, and at the

same time to assist in fostering a better balanced and more insightful policy dialogue in future.