Reproducibility package for External Finance In Emerging Markets And Developing Economies: A Tale Of Differences In Vulnerabilities
Reference ID
RR_WLD_2025_491
Author(s)
Dohan Kim, Gian Maria Milesi-Ferretti
Collections
Metadata
Created on
Nov 26, 2025
Last modified
Dec 01, 2025
Overview
Abstract
Over the past two decades, many emerging markets and developing economies (EMDEs) have been viewed as increasingly resilient to external financial shocks. This paper assesses whether such resilience is broadly shared across EMDEs by classifying them into three tiers based on economic size, income level, institutional strength, and financial integration. We document that while first-tier EMDEs have improved their external balance sheets and reduced dependence on official support, second- and third-tier EMDEs have experienced growing external vulnerabilities since the Global Financial Crisis, marked by rising external debt liabilities and declining FX reserves. Using a range of indicators, including sovereign defaults, arrears, partial defaults, and IMF lending, we identify episodes of external financial distress and show that distress remains widespread among second- and third-tier EMDEs. Empirical analysis confirms that key components of the net international investment position—especially external debt and FX reserves—predicts the onset of external financial distress, with institutional quality shaping the impact: weak institutions amplify risks, while strong institutions mitigate them. These findings highlight the importance of recognizing heterogeneity across EMDEs, strengthening institutional quality alongside external balance-sheet management, and rebuilding buffers to safeguard against renewed global financial stress.
Reproducibility Package
Scripts
File name
RR_WLD_2025_491
Zip package
RR_WLD_2025_491.zip
Title
Reproducibility package for External Finance In Emerging Markets And Developing Economies: A Tale Of Differences In Vulnerabilities
Date
2025-11
Dependencies
Stata dependencies are listed in the ado folder.
Instructions
See README in reproducibility package.
Notes
Computational reproducibility verified by Development Impact (DECDI) Analytics team, World Bank.
Source code repository
| Repository name | URI |
|---|---|
| Reproducible Research Repository (World Bank) | https://reproducibility.worldbank.org |
Reproducibility
Technology environment
Paper exhibits were reproduced on a computer with the following specifications:
• OS: Windows 11 Enterprise
• Processor: Intel(R) Core(TM) i5-1145G7 CPU @ 2.60GHz
• Memory available: 15.7 GB
• Software version: Stata 18.5 MP, Python 3.9.21
Technology requirements
Runtime: 20 minutes.
Reproduction instructions
To reproduce the results in the paper, a new user should follow these steps:
- Secure Access to Data Obtain access to all datasets not included in the reproducibility package. See the subsection Datasets and the project README for details on data sources and access requirements.
- Run the Main Code Open
0_main.do, update the global path to match your local directory, and run the full script. - Reproduce Figure B1 (Requires Stata and Python)
- First, run
fig_B1.doin Stata. - Then, run the Python script
fig_B1.py.
To executefig_B1.py, update the path afterproject =on line 12 with your local directory.
- First, run
Since some data is not included, the package includes the results produced by replicators. These files can be used to review the results presented in the paper.
Data
Datasets
Name
Financial Development Index
Note
Files located in: rawdata/financial_development_imf.dta.
Access policy
Data is publicly available and included in the reproducibility package
License
IMF Data Terms of Use
License URL
https://www.imf.org/en/about/copyright-and-terms#data
Data URL
https://data.imf.org/en/datasets/IMF.MCM:FDI
Citation
International Monetary Fund. (2025). Financial Development Index [dataset]. https://data.imf.org/en/datasets/IMF.MCM:FDI
Name
World Bank International Debt Statistics (IDS)
Note
Files located in: rawdata/WB_IDS/. Includes: Feb2024update.xlsx, IDS2009May.txt, IDS2012Dec.xlsx, IDS2014Dec.xlsx, IDS2017Dec.xlsx, IDS2021Oct.xlsx, IDS2024-December2024.xlsx.
Access policy
Data is publicly available and included in the reproducibility package
License
Creative Commons Attribution 4.0 International License (CC BY 4.0)
License URL
https://www.worldbank.org/en/about/legal/terms-of-use-for-datasets
Data URL
https://www.worldbank.org/en/programs/debt-statistics/publications#databasearchives
Citation
World Bank. (n.d). International Debt Statistics (IDS) [dataset]. https://www.worldbank.org/en/programs/debt-statistics/publications#databasearchives
Name
International Financial Statistics (IFS)
Note
Files located in: rawdata/IMF loans as a share of quota 1970-2024_stacked.xlsx.
Access policy
Data is publicly available and included in the reproducibility package
License
IMF Data Terms of Use
License URL
https://www.imf.org/en/about/copyright-and-terms#data
Data URL
https://data.imf.org/en/datasets/IMF.STA:FA
Citation
International Monetary Fund. (2025). International Financial Statistics, Fund Accounts [dataset]. https://data.imf.org/en/datasets/IMF.STA:FA
Name
IMF Fiscal Rules Dataset
Note
Files located in: rawdata/IMF_FiscalMonitor_20250916.xlsx.
Access policy
Data is publicly available and included in the reproducibility package
License
IMF Data Terms of Use
License URL
https://www.imf.org/en/about/copyright-and-terms#data
Data URL
https://www.imf.org/external/datamapper/fiscalrules/map/map.htm
Citation
Alonso, Virginia, Clara Arroyo, Ozlem Aydin, Vybhavi Balasundharam, Hamid R. Davoodi, Gabriel Hegab, W. Raphael Lam, Anh Nguyen, Natalia Salazar Ferro, Galen Sher, Alexandra Solovyeva, and Nino Tchelishvili. 2025. "Fiscal Rules Dataset: 1985-2024" International Monetary Fund, Washington, DC.
Name
Country Groups Classification
Note
Files located in: rawdata/country_group.dta. Compiled by the authors.
Access policy
Data is included in the reproducibility package
Citation
World Bank (2025). Country Groups Classification [dataset]. Compiled by the authors.
Name
JP Morgan Emerging Markets Bond Index (EMBI)
Note
Files located in: rawdata/EMBI_daily_2000_2024.xlsx.
This dataset contains JP Morgan EMBI daily sovereign bond spreads for a wide set of countries.
List of variables included: Date, Algeria, Angola, Argentina, Armenia, Azerbaijan, Bahrain, Barbados, Belarus, Belize, Bolivia, Brazil, Bulgaria, Cameroon, Chile, China, Colombia, CostaRica, CotedIvoire, Croatia, DominicanRepublic, Ecuador, Egypt, ElSalvador, Ethiopia, Gabon, Georgia, Ghana, Greece, Guatemala, Hungary, Honduras, Indonesia, India, Iraq, Jamaica, Jordan, Kazakhstan, Kenya, Kuwait, Latvia, Lebanon, Lithuania, Malaysia, Maldives, Mexico, Mongolia, Morocco, Mozambique, Namibia, Nigeria, Oman, Pakistan, PapuaNewGuinea, Panama, Paraguay, Peru, Philippines, Poland, Qatar, Romania, Russia, Rwanda, SaudiArabia, Senegal, Serbia, SlovakRepublic, SouthAfrica, Korea, SriLanka, Suriname, Tajikistan, Tanzania, Thailand, TrinidadandTobago, Tunisia, Turkey, UAE, Ukraine, Uruguay, Uzbekistan, Venezuela, Vietnam, and Zambia.
Access policy
Data is restricted and not included in the reproducibility package
License
Proprietary JP Morgan data
License URL
https://www.jpmorgan.com
Data URL
https://www.jpmorgan.com/markets/index-research
Citation
J.P. Morgan. (2025). Emerging Markets Bond Index (EMBI) [dataset]. https://www.jpmorgan.com/markets/index-research
Name
Haver Analytics Macroeconomic Database
Note
Files located in: rawdata/haver_rgdp_cap.dta. Variables: Year (1970-2023), IFS_Code, real GDP per capita (rgdp_pc).
Access policy
Data is restricted and not included in the reproducibility package
Data URL
https://www.haver.com
Citation
Haver Analytics. (2024). Real GDP per capita series [dataset]. https://www.haver.com
Name
PRS Group International Country Risk Guide
Note
Files located in: rawdata/ICRG_Risk_1984_2024_december.xlsx.
Variables include: Country, IFS_Code, Variable, Y1984, Y1985, …, Y2024.
ICRG risk variables covered in the dataset include: **Bureaucracy Quality (L), Civil Disorder, Civil War, Composite Risk Rating, Consumer Confidence, Contract Viability, Corruption (F), Cross-border Conflict, Democratic Accountability (K), Economic Risk Rating, Ethnic Tensions (J), External Conflict (E), Financial Risk Rating, Foreign Pressures, Government Cohesion, Government Stability (A), Internal Conflict (D), Investment Profile (C), Law & Order (I), Legislative Strength, Military in Politics (G), Payment Delays, Political Risk Rating, Popular Support, Poverty, Religious Tensions (H), Repatriation, Risk for Budget Balance, Risk for Current Account as % of GDP, Risk for Current Account as % of XGS, Risk for Debt Service, Risk for Exchange Rate Stability, Risk for Foreign Debt, Risk for GDP Growth, Risk for Inflation, Risk for International Liquidity, Risk for Per Capita GDP, Socioeconomic Conditions (B), Terrorism, Unemployment, and War.
Access policy
Data is restricted and not included in the reproducibility package
Data URL
https://www.prsgroup.com/explore-our-products/icrg/
Citation
PRS Group. (2025). International Country Risk Guide (ICRG) [dataset]. https://www.prsgroup.com/explore-our-products/icrg/
Name
Chinn–Ito Financial Openness Index
Note
Files located in: rawdata/kaopen_2022.xls.
Access policy
Data is publicly available and included in the reproducibility package
License URL
https://web.pdx.edu/~ito/Chinn-Ito_website.htm
Data URL
https://web.pdx.edu/~ito/Chinn-Ito_website.htm
Citation
Chinn, Menzie D. and Hiro Ito (2006). "What Matters for Financial Development? Capital Controls, Institutions, and Interactions," Journal of Development Economics, Volume 81, Issue 1, Pages 163-192 (October).
Name
Sovereign Haircuts Dataset
Note
Files located in: rawdata/Master_Haircuts_Publication April 2025.xlsx.
Access policy
Data is publicly available and included in the reproducibility package
License
Direct download; licensing information not available
Data URL
https://sites.google.com/view/cgrafvonluckner/research-and-data?authuser=0
Citation
Graf von Luckner, C.M., Meyer, J., Reinhart, C.M. et al. Sovereign Haircuts: 200 Years of Creditor Losses. IMF Econ Rev 73, 150–195 (2025). https://doi.org/10.1057/s41308-024-00268-5
Name
Financial Crises Database
Note
Files located in: rawdata/NCW_crises_data.xlsx.
Access policy
Data is publicly available and included in the reproducibility package
License
Direct download; licensing information not available
Citation
Nguyen, T. C., Castro, V., & Wood, J. (2022). A new comprehensive database of financial crises: Identification, frequency, and duration. Economic Modelling, 108, 105770. https://doi.org/10.1016/j.econmod.2022.105770
Name
Quarterly External Debt Statistics (QEDS)
Note
Files located in: rawdata/P_Data_Extract_From_Quarterly_External_Debt_Statistics_GDDS_20250916.xlsx; rawdata/P_Data_Extract_From_Quarterly_External_Debt_Statistics_SDDS_20250916.xlsx.
Access policy
Data is publicly available and included in the reproducibility package
License
Creative Commons Attribution 4.0 International License
License URL
https://www.worldbank.org/en/about/legal/terms-of-use-for-datasets
Data URL
https://www.worldbank.org/en/programs/debt-statistics/qeds
Citation
World Bank. (2025). Quarterly External Debt Statistics [dataset]. https://www.worldbank.org/en/programs/debt-statistics/qeds
Name
External Wealth of Nations complete update
Note
Files located in: rawdata/STATA NFA_1970_2023_Feb25.dta.
Access policy
Data is publicly available and included in the reproducibility package
License URL
https://www.brookings.edu/terms-of-use/
Data URL
https://www.brookings.edu/articles/the-external-wealth-of-nations-database/
Citation
Lane & Milesi-Ferretti. (2025). External Wealth of Nations [dataset]. Brookings. https://www.brookings.edu/articles/the-external-wealth-of-nations-database/
Name
World Bank Country and Lending Groups
Note
Files located in: rawdata/WB_classification.dta. The file was constructed by the authors using public information from: https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups
Access policy
Data is publicly available and included in the reproducibility package
License
Creative Commons Attribution 4.0 International License
Citation
World Bank. (2025). World Bank Country and Lending Groups [dataset]. https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups.
Name
World Development Indicators (WDI)
Note
Files located in: rawdata/WDI_export_import_20250916.xlsx. Variables: Exports, imports, and primary income. Period: 1960-2024.
Access policy
Data is publicly available and included in the reproducibility package
License
Creative Commons Attribution 4.0 International License
License URL
https://www.worldbank.org/en/about/legal/terms-of-use-for-datasets
Data URL
https://databank.worldbank.org/source/world-development-indicators
Citation
World Bank. (2025). World Development Indicators [dataset]. https://databank.worldbank.org/source/world-development-indicators
Name
Worldwide Governance Indicators (WGI)
Note
Files located in: rawdata/wgidataset_2024NovUpdate.dta.
Access policy
Data is publicly available and included in the reproducibility package
License
Creative Commons Attribution 4.0 International License
License URL
https://www.worldbank.org/en/about/legal/terms-of-use-for-datasets
Data URL
https://www.worldbank.org/en/publication/worldwide-governance-indicators
Citation
Worldwide Governance Indicators. (2024). 2024 Update. World Bank (www.govindicators.org).
Data statement
Some data is restricted and has not been included in the reproducibility package. For more details, please refer to the README file.
Description
Output
Type
Working Paper
Title
External Finance In Emerging Markets And Developing Economies: A Tale Of Differences In Vulnerabilities
Description
Policy Research Working Papers (PRWP)
Authors
| Author | Affiliation | |
|---|---|---|
| Dohan Kim | World Bank | dkim23@worldbank.org |
| Gian Maria Milesi-Ferretti | The Brookings Institution, Hutchins Center on Fiscal and Monetary Policy | GMilesiFerretti@brookings.edu |
Date of production
2025-11-20
Scope and coverage
Geographic locations
| Location | Code |
|---|---|
| World | WLD |
Disclaimer
Disclaimer
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/The World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
Access and rights
License
| Name | URI |
|---|---|
| Modified BSD3 | https://opensource.org/license/bsd-3-clause/ |
Contacts
Contacts
| Name | Affiliation | |
|---|---|---|
| Dohan Kim | World Bank | dkim23@worldbank.org |
| Reproducibility WBG | World Bank | reproducibility@worldbank.org |
Information on metadata
Producers
| Name | Abbreviation | Affiliation | Role |
|---|---|---|---|
| Reproducibility WBG | DECDI | World Bank - Development Impact Department | Verification and preparation of metadata |
Date of Production
2025-11-20
Document version
1