How defensive were lending and aid to HIPC?
AbstractWe examine both grants and net loans made to low income countries during the last two decades to understand the main reasons that motivated the behaviour of both donors and creditors. Our results point to an overall "mixed" evidence, concerning the hypotheses of defensive lending (and defensive granting). Specifically, while a higher level of multilateral debt negatively affects both multilateral new loans and grants to low-income countries, in the case of HIPC such "correction" does not take place at all (in the case of grants) or it is much weaker (in the case of net loans). Bilateral creditors reduce their loans as their debt exposure increases and significantly so in the case of HIPC, while bilateral donors give more grants to HIPC as their bilateral debt share increases.
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Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 115.
Length: 32 pages
Date of creation: 2007
Date of revision: 2007
Debt relief; foreign aid; highly indebted poor countries;
Other versions of this item:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- F35 - International Economics - - International Finance - - - Foreign Aid
- O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
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