Advanced Search
MyIDEAS: Login

Proposal for a Contingency Debt Sustainability Framework

Contents:

Author Info

  • Ferrarini, Benno
Registered author(s):

    Abstract

    Summary We argue that the New Debt Sustainability Framework (NDSF) of the World Bank and IMF is centered on the Country Policy and Institutional Assessment (CPIA) to suit the aid allocation mechanism of the International Development Association (IDA), but fails to deal effectively with the economic vulnerability of low-income countries. Instead, we propose a Contingency Debt Sustainability Framework (CDSF), which identifies the sources of vulnerability and compensates for exogenous shock and trend factors. Without giving rise to significant moral hazard implications, the CDSF is thus suitable to effectively shield low-income countries from the main external causes undermining their achievement of debt sustainability.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.sciencedirect.com/science/article/B6VC6-4SVM14N-2/2/be4937d0d97f2c5786131df3cc663990
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Elsevier in its journal World Development.

    Volume (Year): 36 (2008)
    Issue (Month): 12 (December)
    Pages: 2547-2565

    as in new window
    Handle: RePEc:eee:wdevel:v:36:y:2008:i:12:p:2547-2565

    Contact details of provider:
    Web page: http://www.elsevier.com/locate/worlddev

    Related research

    Keywords: debt sustainability aid allocation low-income countries HIPC Sub-Saharan Africa;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Graham Bird & Alistair Milne, 2003. "Debt Relief for Low Income Countries: Is it Effective and Efficient?," The World Economy, Wiley Blackwell, vol. 26(1), pages 43-59, January.
    2. Kenneth A. Froot & David S. Scharfstein & Jeremy C. Stein, 1990. "LDC Debt: Forgiveness, Indexation, and Investment Incentives," NBER Working Papers 2541, National Bureau of Economic Research, Inc.
    3. Deaton, A., 1999. "Commodity Prices and Growth in Aftica," Papers 186, Princeton, Woodrow Wilson School - Development Studies.
    4. Krugman, Paul, 1988. "Financing vs. forgiving a debt overhang," Journal of Development Economics, Elsevier, vol. 29(3), pages 253-268, November.
    5. Grossman, Herschel I & Van Huyck, John B, 1988. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," American Economic Review, American Economic Association, vol. 78(5), pages 1088-97, December.
    6. Aart Kraay & Vikram Nehru, 2006. "When Is External Debt Sustainable?," World Bank Economic Review, World Bank Group, vol. 20(3), pages 341-365.
    7. Madhur Gautam, 2003. "Debt Relief for the Poorest : An OED Review of the HIPC Initiative," World Bank Publications, The World Bank, number 15164, October.
    8. Maizels, Alfred, 1994. "The continuing commodity crisis of developing countries," World Development, Elsevier, vol. 22(11), pages 1685-1695, November.
    9. Patrick GUILLAUMONT & Lisa CHAUVET, 1999. "Aid and Performance: A Reassessment," Working Papers 199910, CERDI.
    10. Huberman, Gur & Kahn, Charles M, 1988. "Limited Contract Enforcement and Strategic Renegotiation," American Economic Review, American Economic Association, vol. 78(3), pages 471-84, June.
    11. Kevin Ross & R. Brooks & Robert Powell & Ydahlia A. Metzgen Quemarez & Doris C. Ross & Mariano Cortes & Saqib Rizavi & Benoit Ketchekmen & Francesca Fornasari, 1998. "External Debt Histories of Ten Low-Income Developing Countries," IMF Working Papers 98/72, International Monetary Fund.
    12. Christopher L. Gilbert & Alexandra Tabova, 2005. "Can we link concessional debt service to commodity prices?," Department of Economics Working Papers 0508, Department of Economics, University of Trento, Italia.
    13. Deaton, A-S & Miller, R-I, 1995. "International Commodity Prices, Macroeconomic Performance, and Politics in Sub-Saharan Africa," Princeton Studies in International Economics 79, International Economics Section, Departement of Economics Princeton University,.
    14. Tony Killick, 2004. "Politics, Evidence and the New Aid Agenda," Development Policy Review, Overseas Development Institute, vol. 22(1), pages 5-29, 01.
    15. Kanbur, Ravi, 2005. "Reforming the Formula: A Modest Proposal for Introducing Development Outcomes in IDA Allocation Procedures," CEPR Discussion Papers 4971, C.E.P.R. Discussion Papers.
    16. Daniel Kaufmann & Aart Kraay & Massimo Mastruzzi, 2004. "Governance Matters III: Governance Indicators for 1996, 1998, 2000, and 2002," World Bank Economic Review, World Bank Group, vol. 18(2), pages 253-287.
    17. Sebastian Edwards, 2003. "Debt Relief and the Current Account: An Analysis of the HIPC Initiative," The World Economy, Wiley Blackwell, vol. 26(4), pages 513-531, 04.
    18. Balassa, Bela, 1982. "Structural adjustment policies in developing economies," World Development, Elsevier, vol. 10(1), pages 23-38, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:36:y:2008:i:12:p:2547-2565. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.