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Dynamic fiscal impact of the debt relief initiatives on african heavily indebted poor countries (HIPCs)


  • Danny Cassimon

    () (University of Antwerp)

  • Marin Ferry

    () (LEDa, UMR DIAL-Paris-Dauphine)

  • Marc Raffinot

    () (LEDa, UMR DIAL-Paris-Dauphine)

  • Bjorn Van Campenhout

    () (International Food Policy Research Institute (IFPRI))


(english) After two debt relief initiatives launched in 1996 (the Heavily Indebted Poor Countries, HIPC Initiative) and in 1999 (The enhanced HIPC initiative), the G7 decided to go further by cancelling the remaining multilateral debt for these HIPC countries through the Multilateral Debt Relief Initiative (MDRI, 2005). A few papers tried to assess the desired fiscal response effects of those initiatives. This paper uses an extended dataset and alternative econometric techniques in order to tackle methodological issues as endogeneity and fixed effects. We found that debt relief and especially the enhanced HIPC initiative have had a positive impact on the total domestic revenue and the public investment (as percentages of the GDP). Thanks to our large observation span, we also observed that the MDRI led to a significant additional improvement of the level of public investment and domestic revenues ratio, although these effects are smaller than the HIPCs ones. _________________________________ (français) Après deux initiatives de réduction de dette (PPTE I fin 1996 et PPTE II en 1999), le G7 décida d’annuler la totalité de la dette multilatérale (Initiative d’Annulation de la Dette Multilatérale, IADM en 2005). Quelques travaux ont essayé d’évaluer l’impact de ces mesures sur les finances publiques des pays bénéficiaires. Ce travail utilise une base de données plus étendue et des méthodes économétriques alternatives pour tenir compte de l’endogénéïté et des effets fixes. Nous trouvons que les réductions de dette (en particulier l’initiative PPTE II) ont eu un impact positif sur la pression fiscale et sur les investissements publics (en pourcentage du PIB). Grâce à l’extension de la période d’étude, nous observons également que l’IADM a un effet similaire, quoique moins persistent.

Suggested Citation

  • Danny Cassimon & Marin Ferry & Marc Raffinot & Bjorn Van Campenhout, 2013. "Dynamic fiscal impact of the debt relief initiatives on african heavily indebted poor countries (HIPCs)," Working Papers DT/2013/01, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201301

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    References listed on IDEAS

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    16. Danny Cassimon & Bjorn Van campenhout, 2008. "Comparative Fiscal Response Effects Of Debt Relief: An Application To African Hipcs," South African Journal of Economics, Economic Society of South Africa, vol. 76(3), pages 427-442, September.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Le Club de Paris et l'annulation des dettes des pays pauvres
      by (Le Captain') in Captain Economics on 2013-03-11 15:29:17


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    Cited by:

    1. Danny Cassimon & Dennis Essers & Karel Verbeke, 2015. "What to do after the clean slate? Post-relief public debt sustainability and management," BeFinD Working Papers 0103, University of Namur, Department of Economics.
    2. Cesar Calderon & Sebastien Boreux, 2016. "Citius, Altius, Fortius: Is Growth in Sub-Saharan Africa More Resilient?," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 25(4), pages 502-528.
    3. repec:nam:befdwp:3 is not listed on IDEAS
    4. Punam Chuhan-Pole & Cesar Calderon & Gerard Kambou & Sebastien Boreux & Mapi M. Buitano & Vijdan Korman & Megumi Kubota, "undated". "Africa's Pulse, October 2015," World Bank Other Operational Studies 22722, The World Bank.

    More about this item


    HIPC; MDRI; Debt relief; Fiscal revenue; Public investment; Fiscal response.;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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