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Why heavily indebted poor countries have failed to pay back their debt? An empirical investigation (in English)

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  • Menbere Workie Tiruneh

    (Institute of Slovak and World Economies, Slovak Academy of Sciences, Bratislava, Slovakia)

Abstract

This paper, in using cross-section pooled logit, probit, and fixed-effects logit models, empirically explores the main factors affecting the rescheduling of contractual debt-service payments by heavily indebted poor countries (HICPs) in the late 1980s and the 1990s. The results seem to suggest that HIPCs past external debt, per-capita income level, GDP growth rate, trade openness, foreign-currency reserves, and capital inflows are core factors affecting debt servicing.

Suggested Citation

  • Menbere Workie Tiruneh, 2005. "Why heavily indebted poor countries have failed to pay back their debt? An empirical investigation (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 55(3-4), pages 124-140, March.
    • Handle: RePEc:fau:fauart:v:55:y:2005:i:3-4:p:124-140
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    References listed on IDEAS

    as
    1. Gary M. Woller & Kerk Phillips, 1996. "Commercial Banks And Ldc Debt Reduction," Contemporary Economic Policy, Western Economic Association International, vol. 14(2), pages 107-123, April.
    2. Berg, Andrew & Sachs, Jeffrey, 1988. "The debt crisis structural explanations of country performance," Journal of Development Economics, Elsevier, vol. 29(3), pages 271-306, November.
    3. Fafchamps, Marcel, 1996. "Sovereign debt, structural adjustment, and conditionality," Journal of Development Economics, Elsevier, vol. 50(2), pages 313-335, August.
    4. Hajivassiliou, Vassilis A., 1987. "The external debt repayments problems of LDC's : An econometric model based on panel data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 205-230.
    5. Jeffrey Sachs, 1986. "Managing the LDC Debt Crisis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(2), pages 397-440.
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    More about this item

    Keywords

    debt crisis; debt rescheduling; logit model; fixed effects; heavily indebted poor countries (HIPC);
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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