Can domestic debt contribute to the financing of the “Millennium Development Goals” ? The case of the West African Economic and Monetary Union (WAEMU)
Developing countries are being urged to extent public spending to reach The Millennium Development Goals (MDGs). Following a series of debt cancellations, the public debt of many developing countries has reached low levels, so that external borrowing is a plausible option. However, developing countries can not exclusively rely on external financing. Consequently, is an increase in the domestic debt possible and desirable? This paper investigates this issue in the case of the West African Economic and Monetary Union (WAEMU), of which several countries have benefited from important debt cancellations. We show that an increase in the domestic debt is feasible for some of the WAEMU countries since 1) there exist excess bank liquidity and foreign reserves which involve a low cost for public finance, 2) the main macroeconomic risks (debt distress, crowding out of private investment and real exchange rate appreciation) can be averted and 3) absorptive capacity may be enlarged by giving larger role to regional institutions or local communities.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: 65 Bd. F. Mitterrand, 63000 Clermont-Ferrand|
Phone: (33-4) 73 17 74 00
Fax: (33-4) 73 17 74 28
Web page: http://cerdi.org/
More information through EDIRC
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.:
- Raghuram G. Rajan & Arvind Subramanian, 2005.
"Aid and Growth: What Does the Cross-Country Evidence Really Show?,"
NBER Working Papers
11513, National Bureau of Economic Research, Inc.
- Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
- Raghuram Rajan & Arvind Subramanian, 2005. "Aid and Growth; What Does the Cross-Country Evidence Really Show?," IMF Working Papers 05/127, International Monetary Fund.
- Raghuram G. Rajan, 2005. "Aid and Growth: What Does The Cross-Country Evidence Really Show?," Working Papers id:54, eSocialSciences.
- Peter S. Heller, 2005. "Understanding Fiscal Space," IMF Policy Discussion Papers 05/4, International Monetary Fund.
- Alexander Pivovarsky & Benedict J. Clements & Sanjeev Gupta & Erwin Tiongson, 2003. "Foreign Aid and Revenue Response; Does the Composition of Aid Matter?," IMF Working Papers 03/176, International Monetary Fund.
- Bourguignon, Fran.ois & Sundberg, Mark, 2006. "Absorptive Capacity and Achieving the MDGs," Working Paper Series RP2006/47, World Institute for Development Economic Research (UNU-WIDER).
- Beetsma, R.M.W.J. & Bovenberg, A.L., 1995.
"Does Monetary Unification Lead to Excessive Debt Accumulation?,"
DELTA Working Papers
95-23, DELTA (Ecole normale supérieure).
- Beetsma, Roel M. W. J. & Bovenberg, A. Lans, 1999. "Does monetary unification lead to excessive debt accumulation?," Journal of Public Economics, Elsevier, vol. 74(3), pages 299-325, December.
- Beetsma, Roel & Bovenberg, A Lans, 1995. "Does Monetary Unification Lead to Excessive Debt Accumulation?," CEPR Discussion Papers 1299, C.E.P.R. Discussion Papers.
- Beetsma, R.M.W.J. & Bovenberg, A.L., 1995. "Does monetary unification lead to excessive debt accumulation," Discussion Paper 1995-112, Tilburg University, Center for Economic Research.
- Fielding, David & Shields, Kalvinder, 2001.
"Modelling macroeconomic shocks in the CFA Franc Zone,"
Journal of Development Economics,
Elsevier, vol. 66(1), pages 199-223, October.
- David Fielding & Kalvinder Shields, 2000. "Modeling Macroeconomic Shocks in the CFA Franc Zone," Discussion Papers in Economics 00/7, Department of Economics, University of Leicester.
- Patrick Villieu, 2003.
"Pacte de stabilité, crédibilité du policy mix et coordination des politiques budgétaires en union monétaire,"
- Patrick Villieu, 2003. "Pacte de stabilité, crédibilité du policy mix et coordination des politiques budgétaires en union monétaire," Revue économique, Presses de Sciences-Po, vol. 54(1), pages 25-46.
- Patrick Villieu, 2002. "Pacte de stabilité, crédibilité du policy mix et coordination des politiques budgétaires en union monétaire," Post-Print halshs-00253479, HAL.
- Yasser Abdih & Charalambos Tsangarides, 2010.
"FEER for the CFA franc,"
Taylor & Francis Journals, vol. 42(16), pages 2009-2029.
- Nasser Ary Tanimoune & Patrick Plane, 2005. "Performance et convergence des politiques économiques en zone franc," Revue Française d'Économie, Programme National Persée, vol. 20(1), pages 235-268.
- Author-Name: Jeffrey D. Sachs & John W. McArthur & Guido Schmidt-Traub & Margaret Kruk & Chandrika Bahadur & Michael Faye & Gordon McCord, 2004. "Ending Africa's Poverty Trap," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 117-240.
- Jean-François BRUN & Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 1997.
"How Instability Lowers African Growth ?,"
- Xavier Debrun, 2000. "Fiscal Rules in a Monetary Union: A Short-Run Analysis," Open Economies Review, Springer, vol. 11(4), pages 323-358, October.
When requesting a correction, please mention this item's handle: RePEc:cdi:wpaper:917. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod)
If references are entirely missing, you can add them using this form.