IDEAS home Printed from https://ideas.repec.org/p/ctn/dpaper/2018-02.html
   My bibliography  Save this paper

The Determinants of External debt in Sub Saharan Africa

Author

Listed:
  • Adonia Chiminya

    (School of Economics, University of Cape Town)

  • J. Paul Dunne

    (School of Economics, University of Cape Town)

  • Eftychia Nikolaidou

    (School of Economics, University of Cape Town)

Abstract

Determining the factors that influence external indebtedness in developing countries became an important focus for research following the damaging external debt crises of the early 1970s. While the resulting research has provided valuable insights, there has been a tendency to rely solely on economic factors and surprisingly little concern has been given to political factors that may be important determinants of debt. This paper investigates the main contributing factors to debt accumulation using panel data methods and focusing on a group of 36 Sub Saharan Africa countries (SSA) over the period 1975 to 2012. Instead of relying only on economic variables, the paper introduces a number of political variables that are found to be important and show the need to nuance the economic arguments. Democratically administered governments in the region are found to accumulate more debt than autocratic ones and parliamentary systems seem to accumulate more debt than presidential democracies. Furthermore, countries with a constrained executive and countries with more open and competitive electoral systems tend to lead to the accumulation of less debt. Finally, countries that received debt relief seem to accumulate less debt relative to those that did not while economic activity and openness are important in reducing debt in the region.

Suggested Citation

  • Adonia Chiminya & J. Paul Dunne & Eftychia Nikolaidou, 2018. "The Determinants of External debt in Sub Saharan Africa," School of Economics Macroeconomic Discussion Paper Series 2018-02, School of Economics, University of Cape Town.
  • Handle: RePEc:ctn:dpaper:2018-02
    as

    Download full text from publisher

    File URL: https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxzb2VtYWNyb2Vjb3xneDo2MmE4M2MxMDFhNzJiMTNh
    File Function: Full text
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ctn:dpaper:2018-02. 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: (Kevin Kotze). General contact details of provider: http://edirc.repec.org/data/seuctza.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.