Forgive Debt, but Keep Lending
AbstractCancelling of poor-country debt does not mean that the best way to give aid is through grants only. Aid through loans may often prove superior, provided that it maintains debt sustainability. A new scheme for soft loans is suggested, with higher interest rates and cancellation provisions if bad shocks occur, to minimise moral hazard and strengthen debt sustainability
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Bibliographic InfoPaper provided by OECD Publishing in its series OECD Development Centre Policy Insights with number 44.
Date of creation: Apr 2007
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