Do Debt-Service Savings and Grants Boost Social Expenditures?
IMF Working Papers, July 1, 2006
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- Do Debt-Service Savings and Grants Boost Social Expenditures?
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Bibliographic details
- Authors: Alun H. Thomas
- Published: July 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451864403.001
Main Findings
- Declines in debt-service help raise social expenditures.
- No relationship found between grants and social expenditures.
- Since the mid-1980s, low-income countries have managed to fully insulate social expenditures from the effects of budgetary tightening.
- The magnitude of the impact of debt-service declines and grants on social expenditures is dwarfed by the resources needed to enable these countries to reach the Millennium Development Goals.
Scope and Subject Areas
- Evaluates whether debt relief and grants can boost social expenditures in low-income countries.
- Subject: Budget planning and preparation, Education spending, Expenditure, Health, Health care spending.
- Keywords: coefficient, debt ratio, debt service, debt-service saving, WP.
Policy-Relevant Implications
- Debt-service savings can be associated with increased allocations to social sectors.
- Grants alone do not appear to translate into higher social spending.
- Fiscal tightening since the mid-1980s has not reduced social expenditure outcomes in low-income countries, suggesting protective budgeting or prioritization of social spending.
- Meeting Millennium Development Goals requires resources far larger than the fiscal effects observed from debt-service savings and grants.