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The HIPC Initiative: True and False Promises

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  • Cohen, Daniel

Abstract

The paper develops the view that the perspective on the HIPC initiative is distorted by the fact that – contrary to the Brady deal itself – it lacks all perspective on the ‘market value’ of the debt which is written down. The appropriate ‘market value’ is one that takes account of the risk of non-payment: arrears, rescheduling and ‘constrained’ refinancing of various sorts. Building upon econometric evidence that relies on middle income debtors in the eighties, the paper argues that the initiative is about ten times less generous than face value accounting would suggest.

Suggested Citation

  • Cohen, Daniel, 2000. "The HIPC Initiative: True and False Promises," CEPR Discussion Papers 2632, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:2632
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    Cited by:

    1. Johansson, Pernilla, 2008. "Debt Relief, Investment and Growth," Working Papers 2008:11, Lund University, Department of Economics.
    2. repec:bep:maccon:v:5:y:2005:i:1:p:1133-1133 is not listed on IDEAS
    3. Daniela López, 2003. "Assessing Bolivia´s debt relief under the heavily, indebted poor countries initiative," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 6(2-1), pages 89-138, December.
    4. Marin Ferry & Marc Raffinot, 2018. "Curse or Blessing? Has the impact of debt relief lived up to expectations? A review of the effects of the multilateral debt relief initiatives for low-income countries," Working Papers DT/2018/12, DIAL (Développement, Institutions et Mondialisation).
    5. Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2007. "Loans or Grants?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 764-782, December.
    6. repec:ces:ifosdt:v:54:y:2001:i:01:p:06-14 is not listed on IDEAS
    7. European Network on Debt and Development, 2001. "Debt Reduction for Poverty Eradication in the Least Developed Countries: Analysis and Recommendations on LDC Debt," WIDER Working Paper Series 110, World Institute for Development Economic Research (UNU-WIDER).
    8. Andy Haldane, Bank of England & Mark Kruger, Bank of Canada, 2002. "The Resolution of International Financial Crises: Private Finance and Public Funds," Bank of Canada Review, Bank of Canada, vol. 2001(Winter), pages 3-13.
    9. Burnside, Craig & Fanizza, Domenico, 2001. "Hiccups for HIPCs?," WIDER Working Paper Series 099, World Institute for Development Economic Research (UNU-WIDER).
    10. Cohen, Daniel & Portes, Richard, 2004. "Dealing with Destabilizing 'Market Discipline'," CEPR Discussion Papers 4280, C.E.P.R. Discussion Papers.
    11. Miguel Messmacher & Mark Kruger, 2004. "Sovereign Debt Defaults and Financing Needs," IMF Working Papers 04/53, International Monetary Fund.
    12. HEPP, Ralf, 2010. "CONSEQUENCES OF DEBT RELIEF INITIATIVES IN THE 1990s," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    13. Peter Nunnenkamp & Peter Wahl & Thomas Wollenzien, 2001. "Was bringt das Entschuldungsprogramm für hochverschuldete arme Länder?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 54(01), pages 03-14, March.
    14. 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.
    15. Berthelemy, Jean-Claude, 2001. "HIPC Debt Relief and Policy Reform Incentives," WIDER Working Paper Series 105, World Institute for Development Economic Research (UNU-WIDER).
    16. Johansson, Pernilla, 2010. "Debt Relief, Investment and Growth," World Development, Elsevier, vol. 38(9), pages 1204-1216, September.
    17. Marc Raffinot, 2006. "Prêts ou dons. Commentaires," Revue d’économie du développement, De Boeck Université, vol. 14(2), pages 159-165.
    18. Ralf Hepp, 2005. "Can Debt Relief Buy Growth?," International Finance 0510003, University Library of Munich, Germany.
    19. Ralf Hepp, 2005. "Health Expenditures Under the HIPC Debt Initiative," International Finance 0510005, University Library of Munich, Germany.
    20. Neumayer, Eric, 2002. "Is Good Governance Rewarded? A Cross-national Analysis of Debt Forgiveness," World Development, Elsevier, vol. 30(6), pages 913-930, June.
    21. repec:bpj:bejmac:v:5:y:2005:i:1:p:1133-1133 is not listed on IDEAS
    22. repec:dau:papers:123456789/10905 is not listed on IDEAS

    More about this item

    Keywords

    Aid; Debt; HIPC;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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