A Constrained Choice? Impact of Concessionality Requirements on Borrowing Behavior

By Calixte Ahokpossi, Laurence Allain, Giovanna Bua

September 24, 2014

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Format: Chicago

Calixte Ahokpossi, Laurence Allain, and Giovanna Bua. A Constrained Choice? Impact of Concessionality Requirements on Borrowing Behavior, (USA: International Monetary Fund, 2014) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper uses the propensity matching score approach to assess the impact of the IMF’s debt limits policy (DLP) on borrowing behavior in countries eligible to borrow from its concessional lending window. The paper finds that countries under the DLP borrow significantly higher amounts of concessional resources. However, there is no evidence that the DLP significantly impacts the level of non-concessional borrowing nor the terms of such borrowing. This result is confirmed by the heterogeneity analysis, suggesting that the level of development, rather than concessionality requirements, is the key driver of non-concessional borrowing.

Subject: Concessional external borrowing, Debt limits, Infrastructure

Keywords: Debt limits policy, IMF program, Program, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/176
Stock No:

WPIEA2014176
ISBN:

9781498349727
ISSN:

1018-5941

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