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How has governance impacted debt servicing

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  • Anselm Komla Abotsi

    (University of Education, Winneba)

Abstract

Debt servicing has remained a topical issue within academic circles and among most countries in recent times. The external debt service obligation has become a burden on many countries. This study explores how quality governance influences the ability of countries to fulfil their debt servicing obligations. The frequency of the data used is annual, and it spans from 1996 to 2022 for 102 countries. Using the system GMM estimation technique, the study finds that an improvement in government effectiveness, control of corruption, and political stability is associated with an increase in the debt service percentage of gross national income. It is recommended that governments improve the quality of public and civil services and avoid unproductive political interference, formulate quality and sound policies and be committed to their implementation, build confidence in economic agents, and ensure peaceful and stable countries to boost revenue generation to meet their debt service obligations.

Suggested Citation

  • Anselm Komla Abotsi, 2025. "How has governance impacted debt servicing," SN Business & Economics, Springer, vol. 5(8), pages 1-24, August.
    • Handle: RePEc:spr:snbeco:v:5:y:2025:i:8:d:10.1007_s43546-025-00867-y
    DOI: 10.1007/s43546-025-00867-y
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