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Debt Relief Effectiveness and Institution Building

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Author Info
Andrea Filippo Presbitero () (Universit… Politecnica delle Marche, Department of Economics, MoFiR)

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Abstract

The history of debt relief is now particularly long, the associated costs are soaring and the outcomes are at least uncertain. This paper reviews and provides new evidence on the effects of recent debt relief programs on different macroeconomic indicators in developing countries, focusing on the Highly Indebted Poor Countries. Besides, the relationship between debt relief and institutional change is investigated to assess whether donors are moving towards and ex-post governance conditionality. Results show that debt relief is only weakly associated with subsequent improvements in economic performance but it is correlated with increasing domestic debt in HIPCs, undermining the positive achievements in reducing external debt service. Finally, there is evidence that donors are moving towards a more sensible allocation of debt forgiveness, rewarding countries with better policies and institutions.

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File URL: http://dea2.univpm.it/quaderni/pdfmofir/Mofir015.pdf
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Publisher Info
Paper provided by Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economics in its series Mo.Fi.R. Working Papers with number 15.

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Length: 35
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:anc:wmofir:15

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Web page: http://www.mofir.univpm.it/

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Related research
Keywords: Debt Relief; HIPC; Institutions;

Other versions of this item:

Find related papers by JEL classification:
C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data
F34 - International Economics - - International Finance - - - International Lending and Debt Problems
H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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