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The HIPC initiative and China’s emergence as a lender: post hoc or propter hoc?

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  • Cordella, Tito
  • Cufre, Maia
  • Presbitero, Andrea F.

Abstract

Twenty years after the Heavily Indebted Poor Countries (HIPC) debt relief initiative, debt levels in low-income countries are rising again, renewing sustainability concerns. The prevailing view suggests that China and other emerging lenders exploited the HIPC initiative to expand lending. Using a synthetic control method to generate a counterfactual, we find that, contrary to this narrative, China and other emerging lenders reduced net lending after debt relief; only multilateral creditors increased it. Furthermore, we find no evidence to support the claim that debt relief encourages lending to political allies. Overall, debt relief seems to have had a limited influence on subsequent lending patterns.

Suggested Citation

  • Cordella, Tito & Cufre, Maia & Presbitero, Andrea F., 2026. "The HIPC initiative and China’s emergence as a lender: post hoc or propter hoc?," Journal of Development Economics, Elsevier, vol. 179(C).
    • Handle: RePEc:eee:deveco:v:179:y:2026:i:c:s030438782500183x
    DOI: 10.1016/j.jdeveco.2025.103632
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F60 - International Economics - - Economic Impacts of Globalization - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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