Can HIPCs Use Hyper-Incentives?
Hyper-incentive contracts (Menzies 2004) can be used to pursue humanitarian goals (providing a safety net) while allowing creditors to offer innovative repayment friendly contracts to debtors (eliminating a debt overhang). Both the contract of Krugman (1988) and the hyper-incentive contract are illustrated with some calculations based on current Highly Indebted Poor Countries (HIPCs). The outcomes for the two contracts are similar, but the twelve countries examined could each benefit by an average amount of $US2002100 million under a hyper-incentive contract
References listed on IDEAS
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.:
- Tito Cordella & Giovanni Dell'Aricca, 2002. "Limits of Conditionality in Poverty Reduction Programs," IMF Staff Papers, Palgrave Macmillan, vol. 49(Special i), pages 68-86.
- Krugman, Paul, 1988.
"Financing vs. forgiving a debt overhang,"
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Elsevier, vol. 29(3), pages 253-268, November.
- Giovanni Dell'Ariccia & Tito Cordella, 2002. "Limits of Conditionality in Poverty Reduction Programs," IMF Working Papers 02/115, International Monetary Fund.
- Eaton, Jonathan, 1992.
"Sovereign debt : a primer,"
Policy Research Working Paper Series
855, The World Bank.
- Jonathan Eaton, 1991. "Sovereign Debt: A Primer," Boston University - Institute for Economic Development 21, Boston University, Institute for Economic Development.
- Fernandez-Ruiz, Jorge, 1996. "Debt and incentives in a dynamic context," Journal of International Economics, Elsevier, vol. 41(1-2), pages 139-151, August.
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