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CONSEQUENCES OF DEBT RELIEF INITIATIVES IN THE 1990s

  • HEPP, Ralf

In this paper I investigate the effects of recent debt relief initiatives on resource flows to low-income developing countries. For countries that are part of the Heavily Indebted Poor Countries (HIPC) initiative, I find that good macroeconomic management does not influence the level of resource and foreign aid receipts. Furthermore, my estimates suggest HIPC countries receive higher net transfers than non-HIPC countries in the 1990s with the differences declining after 1996. Confirming findings in the earlier literature, my results suggest that aid flows have not changed significantly in response to debt relief.

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Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

Volume (Year): 10 (2010)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:eaa:aeinde:v:10:y:2010:i:1_1
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References listed on IDEAS
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  1. Chang, Charles C. & Fernandez-Arias, Eduardo & Serven, Luis, 1999. "Measuring aid flows : a new approach," Policy Research Working Paper Series 2050, The World Bank.
  2. Easterly, W & Levine, R, 1996. "Africa's Growth Tragedy : Policies and Ethnic Divisions," Papers 536, Harvard - Institute for International Development.
  3. Krugman, Paul, 1988. "Financing vs. forgiving a debt overhang," Journal of Development Economics, Elsevier, vol. 29(3), pages 253-268, November.
  4. Ralf Hepp, 2005. "Consequences of Debt Relief Initiatives in the 1990s," International Finance 0510004, EconWPA.
  5. Silvia Marchesi & Alessandro Missale, 2004. "What does motivate lending and aid to the HIPCs?," Development Working Papers 189, Centro Studi Luca d\'Agliano, University of Milano.
  6. Stijn Claessens & Danny Cassimon, 2007. "Empirical evidence on the new international aid architecture," WEF Working Papers 0026, ESRC World Economy and Finance Research Programme, Birkbeck, University of London.
  7. Chauvin, Nicolas Depetris & Kraay, Aart, 2006. "Who gets debt relief ?," Policy Research Working Paper Series 4000, The World Bank.
  8. Howard White & Tony Killick & Steve Kayizzi-Mugerwa & Marie-Angelique Savane, 2001. "African Poverty at the Millennium : Causes, Complexities, and Challenges," World Bank Publications, The World Bank, number 13866, February.
  9. Alberto Alesina & Beatrice Weder, 1999. "Do Corrupt Governments Receive Less Foreign Aid?," NBER Working Papers 7108, National Bureau of Economic Research, Inc.
  10. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
  11. Kamau Thugge & Anthony R. Boote, 1997. "Debt Relief for Low-Income Countries and the HIPC Initiative," IMF Working Papers 97/24, International Monetary Fund.
  12. BERLAGE, Lode & CASSIMON, Danny & DREZE, Jacques & REDING, Paul, 2000. "Prospective aid and indebtedness relief: a proposal," CORE Discussion Papers 2000032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  13. Jacky Amprou & Patrick Guillaumont & Sylviane Guillaumont Jeanneney, 2007. "Aid Selectivity According to Augmented Criteria," The World Economy, Wiley Blackwell, vol. 30(5), pages 733-763, 05.
  14. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  15. Dollar, David & Levin, Victoria, 2004. "Increasing selectivity of foreign aid, 1984-2002," Policy Research Working Paper Series 3299, The World Bank.
  16. Nunnenkamp, Peter & Thiele, Rainer, 2006. "Targeting aid to the needy and deserving : nothing but promises?," Open Access Publications from Kiel Institute for the World Economy 3875, Kiel Institute for the World Economy (IfW).
  17. Giovanni Dell'Ariccia & Tito Cordella, 2002. "Limits of Conditionality in Poverty Reduction Programs," IMF Working Papers 02/115, International Monetary Fund.
  18. Alberto Alesina & David Dollar, 1998. "Who Gives Foreign Aid to Whom and Why?," NBER Working Papers 6612, National Bureau of Economic Research, Inc.
  19. repec:cor:louvrp:-1660 is not listed on IDEAS
  20. Daniel Cohen, 2000. "The HIPC Initiative: True and False Promises," OECD Development Centre Working Papers 166, OECD Publishing.
  21. Dollar, David & Easterly, William, 1999. "The search for the key : aid, investment, and policies in Africa," Policy Research Working Paper Series 2070, The World Bank.
  22. 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.
  23. Tito Cordella & Giovanni Dell'Ariccia, 2003. "Budget Support Versus Project Aid," IMF Working Papers 03/88, International Monetary Fund.
  24. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer.
  25. Nicolas Depetris Chauvin & Aart Kraay, 2005. "What Has 100 Billion Dollars Worth of Debt Relief Done for Low- Income Countries?," International Finance 0510001, EconWPA.
  26. Maizels, Alfred & Nissanke, Machiko K., 1984. "Motivations for aid to developing countries," World Development, Elsevier, vol. 12(9), pages 879-900, September.
  27. Berthelemy, Jean-Claude & Tichit, Ariane, 2002. "Bilateral Donors' Aid Allocation Decisions: A Three-dimensional Panel Analysis," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  28. Robert Powell, 2003. "Debt Relief, Additionality, and Aid Allocation in Low Income Countries," IMF Working Papers 03/175, International Monetary Fund.
  29. Coate, Stephen, 1995. "Altruism, the Samaritan's Dilemma, and Government Transfer Policy," American Economic Review, American Economic Association, vol. 85(1), pages 46-57, March.
  30. Easterly, William, 1999. "How did highly indebted poor countries become highly indebted? : reviewing two decades of debt relief," Policy Research Working Paper Series 2225, The World Bank.
  31. Renard, Robrecht & Cassimon, Danny, 2001. "On the Pitfalls of Measuring Aid," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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