Formulation of public debt management strategies: An empirical study of possible drivers
AbstractA well-designed public debt management strategy can help countries reduce their borrowing cost, contain financial risks and develop their domestic markets. Using survey data on debt management strategies, this paper studies whether the probability that a country has a formal debt management strategy, publishes the strategy document, and uses quantitative benchmarks to formulate its debt management strategy is affected by democratic accountability, institutional quality, past debt crises/defaults, official development assistance, and participation in debt management programs. We find that countries located in Latin America and the Caribbean are less likely to have developed a debt management strategy and, if they have, are less likely to publish it. In contrast, countries located in the Middle East and North Africa are less likely to use quantitative benchmarks in the formulation of their debt management strategies. A country is more likely to have developed a debt management strategy if it has the experience of a past debt crisis, but not of repeated debt crises. Institutional quality and democratic accountability could significantly contribute to the emergence of more transparent and accountable debt management strategies in developing countries. IFIs’ technical assistance on public debt management could be enhanced by IFIs conducting their own, prior diagnostic reviews.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Systems.
Volume (Year): 36 (2012)
Issue (Month): 2 ()
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More information through EDIRC
Public debt management strategy; Cross-country survey; Institutional factors; Regional location; Debt crises; Development assistance;
Find related papers by JEL classification:
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
- O23 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
- O50 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - General
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