Debt Relief Effectiveness and Institution Building
AbstractThe 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.
Download InfoIf 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 12597.
Date of creation: 04 Dec 2008
Date of revision:
HIPC; Debt Relief; Institutions;
Other versions of this item:
- Andrea F. Presbitero, 2009. "Debt-Relief Effectiveness and Institution-Building," Development Policy Review, Overseas Development Institute, vol. 27(5), pages 529-559, 09.
- Andrea Filippo Presbitero, 2009. "Debt Relief Effectiveness and Institution Building," Mo.Fi.R. Working Papers 15, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-10 (All new papers)
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.:
- Author-Name: Jeffrey D. Sachs & John W. McArthur & Guido Schmidt-Traub & Margaret Kruk & Chandrika Bahadur & Michael Faye & Gordon McCord, 2004. "Ending Africa's Poverty Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 117-240.
- Arvind Subramanian & Raghuram Rajan, 2005.
"What Undermines Aid's Impact on Growth?,"
IMF Working Papers
05/126, International Monetary Fund.
- Todd Moss & Gunilla Pettersson & Nicolas van de Walle, 2006. "An Aid-Institutions Paradox? A Review Essay on Aid Dependency and State Building in Sub-Saharan Africa," Working Papers 74, Center for Global Development.
- repec:rie:review:y:2006:v:3:i:4 is not listed on IDEAS
- Andrea F. PRESBITERO, 2006. "The Debt-Growth Nexus: a Dynamic Panel Data Estimation," Rivista Italiana degli Economisti, SIE - Societa' Italiana degli Economisti (I), vol. 11(3), pages 417-462, December.
- Ugo Panizza, 2008. "Domestic And External Public Debt In Developing Countries," UNCTAD Discussion Papers 188, United Nations Conference on Trade and Development.
- Christina Daseking & Robert Powell, 1999. "From Toronto Terms to the HIPC Initiative - A Brief History of Debt Relief for Low-Income Countries," IMF Working Papers 99/142, International Monetary Fund.
- Tito Cordella & Luca Antonio Ricci & Marta Ruiz-Arranz, 2005. "Debt Overhang or Debt Irrelevance? Revisiting the Debt Growth Link," IMF Working Papers 05/223, International Monetary Fund.
- Freytag, Andreas & Pehnelt, Gernot, 2009. "Debt Relief and Governance Quality in Developing Countries," World Development, Elsevier, vol. 37(1), pages 62-80, January.
- Lora, Eduardo & Olivera, Mauricio, 2007.
"Public debt and social expenditure: Friends or foes?,"
Emerging Markets Review,
Elsevier, vol. 8(4), pages 299-310, December.
- Eduardo Lora & Mauricio Olivera, 2006. "Public Debt and Social Expenditure: Friends or Foes?," Research Department Publications 4465, Inter-American Development Bank, Research Department.
- Alberto Alesina & David Dollar, 1998.
"Who Gives Foreign Aid to Whom and Why?,"
NBER Working Papers
6612, National Bureau of Economic Research, Inc.
- Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
- Jean Imbs & Romain Ranciere, 2005.
"The Overhang Hangover,"
219, Barcelona Graduate School of Economics.
- Jean Imbs & Romain Rancière, 2005. "The Overhang Hangover," Swiss Finance Institute Research Paper Series 06-03, Swiss Finance Institute.
- Imbs, Jean & Ranciere, Romain, 2006. "The Overhang Hangover," CEPREMAP Working Papers (Docweb) 0604, CEPREMAP.
- Imbs, Jean & Ranciere, Romain, 2005. "The overhang hangover," Policy Research Working Paper Series 3673, The World Bank.
- Jean Imbs & Romain Rancière, 2005. "The overhang hangover," Economics Working Papers 878, Department of Economics and Business, Universitat Pompeu Fabra.
- Imbs, Jean & Rancière, Romain, 2005. "The Overhang Hangover," CEPR Discussion Papers 5210, C.E.P.R. Discussion Papers.
- Alberto Alesina & Beatrice Weder, 2002.
"Do Corrupt Governments Receive Less Foreign Aid?,"
American Economic Review,
American Economic Association, vol. 92(4), pages 1126-1137, September.
- Dollar, David & Levin, Victoria, 2006. "The Increasing Selectivity of Foreign Aid, 1984-2003," World Development, Elsevier, vol. 34(12), pages 2034-2046, December.
- Alesina, Alberto & Weder, Beatrice, 2002. "Do Corrupt Governments Receive Less Foreign Aid?," Scholarly Articles 4553011, Harvard University Department of Economics.
- Sana Harrabi & Lobna Bousrih & Mohammed Salisu, 2007. "Debt Relief and Credit to the Private Sector in African Countries," African Development Review, African Development Bank, vol. 19(3), pages 469-480.
- Paul R. Krugman, 1989.
"Financing vs. Forgiving a Debt Overhang,"
NBER Working Papers
2486, National Bureau of Economic Research, Inc.
- Allan Drazen, 2002. "Conditionality and Ownership in IMF Lending: A Political Economy Approach," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 36-67.
- Simeon Djankov & Jose Montalvo & Marta Reynal-Querol, 2008.
"The curse of aid,"
Journal of Economic Growth,
Springer, vol. 13(3), pages 169-194, September.
- Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Economics Working Papers 870, Department of Economics and Business, Universitat Pompeu Fabra.
- Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Working Papers 257, Barcelona Graduate School of Economics.
- Michaelowa, Katharina, 2003. " The Political Economy of the Enhanced HIPC-Initiative," Public Choice, Springer, vol. 114(3-4), pages 461-76, March.
- Asiedu, Elizabeth, 2003. "Debt relief and institutional reform: a focus on Heavily Indebted Poor Countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(4), pages 614-626.
- Junko Koeda, 2008. "A Debt Overhang Model for Low-Income Countries," IMF Staff Papers, Palgrave Macmillan, vol. 55(4), pages 654-678, December.
- Drazen, Allan, 2002. "Conditionality and Ownership in IMF Lending: A Political Economy Approach," CEPR Discussion Papers 3562, C.E.P.R. Discussion Papers.
- John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
- Presbitero Andrea F., 2006.
"The Debt-Growth Nexus: a Dynamic Panel Data Estimation,"
Rivista italiana degli economisti,
Società editrice il Mulino, issue 3, pages 417-462.
- Andrea PRESBITERO, 2005. "The Debt-Growth Nexus: a Dynamic Panel Data Estimation," Working Papers 243, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
- Catherine Pattillo & Hélène Poirson & Luca Antonio Ricci, 2011.
"External Debt and Growth,"
Review of Economics and Institutions,
Università di Perugia, Dipartimento Economia, Finanza e Statistica, vol. 2(3).
- Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
- M. Arnone & A. F. Presbitero, 2007.
"External Debt Sustainability and Domestic Debt in Heavily Indebted Poor Countries,"
Rivista Internazionale di Scienze Sociali,
Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 115(2), pages 187-213.
- Presbitero, Andrea F. & Arnone, Marco, 2006. "External debt sustainability and domestic debt in Heavily Indebted Poor Countries," MPRA Paper 1396, University Library of Munich, Germany.
- HÃ©lÃ¨ne Poirson & Luca Antonio Ricci & Catherine A. Pattillo, 2004. "What Are the Channels Through Which External Debt Affects Growth?," IMF Working Papers 04/15, International Monetary Fund.
- Presbitero, Andrea F., 2006.
"The debt-growth nexus in poor countries: a reassessment,"
Proceedings of the German Development Economics Conference, Berlin 2006
22, Verein für Socialpolitik, Research Committee Development Economics.
- Presbitero, Andrea F., 2008. "The Debt-Growth Nexus in Poor Countries: A Reassessment," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 2(30), pages 1-28.
- Presbitero, Andrea F., 2007. "The debt-growth nexus in poor countries: a reassessment," Economics Discussion Papers 2007-17, Kiel Institute for the World Economy.
- World Bank, 2008. "World Development Indicators 2008," World Bank Publications, The World Bank, number 11855.
- Easterly, William, 2002. "How Did Heavily Indebted Poor Countries Become Heavily Indebted? Reviewing Two Decades of Debt Relief," World Development, Elsevier, vol. 30(10), pages 1677-1696, October.
- Nicolas Depetris Chauvin & Aart Kraay, 2005. "What Has 100 Billion Dollars Worth of Debt Relief Done for Low- Income Countries?," International Finance 0510001, EconWPA.
- Serkan Arslanalp & Peter Blair Henry, 2006. "Policy Watch: Debt Relief," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 207-220, Winter.
- Cordella, Tito & Missaley, Alessandro, 2011. "To give or to forgive ? aid versus debt relief," Policy Research Working Paper Series 5859, The World Bank.
- Johansson, Pernilla, 2010. "Debt Relief, Investment and Growth," World Development, Elsevier, vol. 38(9), pages 1204-1216, September.
- Andrea Filippo Presbitero, 2009. "The 2008-2009 Financial Crisis and the HIPCs: Another Debt Crisis?," Mo.Fi.R. Working Papers 29, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.