Debt Relief and Changing Governance Structures in Developing Countries
AbstractIn this paper we empirically discuss the question whether or not debt relief in the past fifteen years has been economically rational. Analysing the determinants of debt relief our results suggest that governance quality did not play a role in the decision of creditor countries to forgive debt in the 1990s. Furthermore, even the actual debt burden of highly indebted poor countries had not been crucial for the decision whether or not debt forgiveness was granted. Rather, debt relief followed a strong path dependence: those countries whose debt had been forgiven in the first half of the 1990s have also been granted debt forgiveness in the second half of this decade. However, this allocation pattern changed at the beginning of the 21st century, where the path dependence was less strong and at least some dimensions of governance quality have been taken into account by donor countries.
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Bibliographic InfoPaper provided by Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät in its series Jenaer Schriften zur Wirtschaftswissenschaft with number 31/2006.
Date of creation: 20 Oct 2006
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-DEV-2006-11-12 (Development)
- NEP-POL-2006-11-12 (Positive Political Economics)
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- Andreas Freytag & Martin Paldam, 2012. "Comparing good and bad borrowing in developing countries - a study of twin cases," Global Financial Markets Working Paper Series 2012-31, Friedrich-Schiller-University Jena.
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