Can Debt Relief Boost Growth in Poor Countries?

By Toan Quoc Nguyen, Benedict J. Clements, Rina Bhattacharya

March 14, 2006

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Toan Quoc Nguyen, Benedict J. Clements, and Rina Bhattacharya. Can Debt Relief Boost Growth in Poor Countries?, (USA: International Monetary Fund, 2006) accessed November 23, 2024

Also available in: العربية, español, français, русский, 中文

Summary

The Heavily Indebted Poor Countries (HIPC) Initiative, launched in 1999 by the IMF and the World Bank, was the first coordinated effort by the international financial community to reduce the foreign debt of the world’s poorest countries. It was based on the theory that economic growth in heavily indebted poor countries was being stifled by heavy debt burdens, making it virtually impossible for these countries to escape poverty. However, most of the empirical research on the effects of debt on growth has lumped together a diverse group of countries, and the literature on the countries’ impact of debt on poor is scant. This pamphlet presents the findings of the authors’ empirical research into the subject, analyzing the channels through which debt affects growth in low-income countries.

Subject: Asset and liability management, Debt relief, Debt service, Expenditure, External debt, Public debt, Public investment spending

Keywords: Dampening investment, Debt, Debt relief, Debt service, Debt stock, Debt-overhang hypothesis, Debt-service obligation, Effects debt service obligation, EI, GDP, Growth relationship, Investment, Public investment spending

Publication Details

Pages:

20
Volume:

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DOI:

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Issue:

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Series:

Economic Issues No. 2006/004
Stock No:

EIIEA034
ISBN:

9781589063549
ISSN:

1020-5098

Notes

Also available in Arabic, Chinese, French, Russian and Spanish.

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