IDEAS home Printed from https://ideas.repec.org/a/pal/develp/v67y2024i3d10.1057_s41301-025-00438-6.html
   My bibliography  Save this article

Debt Sustainability Analysis as if Development Really Mattered

Author

Listed:
  • Marina Zucker-Marques

    (Boston University Global Development Policy Center)

  • Kevin P. Gallagher

    (Boston University Global Development Policy Center)

  • Ulrich Volz

    (SOAS, University of London
    German Institute of Development and Sustainability
    London School of Economics and Political Science
    Centre for Economic Policy Research)

Abstract

Debt Sustainability Analyses (DSAs) are a crucial tool to assess vulnerability to sovereign debt distress, and in case of debt restructuring, the amount of debt relief needed. However, the DSAs performed by the International Monetary Fund (IMF) have fallen short in several aspects, including the exclusion of climate and development financing commitments. Building on the IMF’s DSA for Low-Income Countries, which is currently under reform, this article devises and performs a reformed global external DSA that identifies the level of external debt developing countries can withstand while mobilizing the necessary finance for development and responding to external shocks. Once external debt for climate and development needs are considered, 46 out of 62 economically vulnerable developing countries would face solvency limits and another 16 would face significant liquidity constraints. This research points to the need to reform DSAs and the need to provide significant debt relief alongside new financing.

Suggested Citation

  • Marina Zucker-Marques & Kevin P. Gallagher & Ulrich Volz, 2024. "Debt Sustainability Analysis as if Development Really Mattered," Development, Palgrave Macmillan;Society for International Deveopment, vol. 67(3), pages 158-166, December.
    • Handle: RePEc:pal:develp:v:67:y:2024:i:3:d:10.1057_s41301-025-00438-6
    DOI: 10.1057/s41301-025-00438-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41301-025-00438-6
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41301-025-00438-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:develp:v:67:y:2024:i:3:d:10.1057_s41301-025-00438-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.