He thanks M. Arnone for useful discussion and A. Kraay for data on debt relief, and seminar participants at the World Bank and the International Monetary Fund for valuable comments on an earlier version of the article. The usual disclaimers apply.
Debt-Relief Effectiveness and Institution-Building
Article first published online: 6 AUG 2009
© The Author 2009. Journal compilation © 2009 Overseas Development Institute.
Development Policy Review
Volume 27, Issue 5, pages 529–559, September 2009
How to Cite
Presbitero, A. F. (2009), Debt-Relief Effectiveness and Institution-Building. Development Policy Review, 27: 529–559. doi: 10.1111/j.1467-7679.2009.00458.x
- Issue published online: 6 AUG 2009
- Article first published online: 6 AUG 2009
- first submitted December 2008 final revision accepted March 2009
- debt relief;
This article provides new evidence on the effects of recent debt-relief programmes on different macroeconomic indicators in developing countries, focusing on the Heavily Indebted Poor Countries (HIPCs). The relationship between debt relief and institutional change is also investigated to assess whether donors are moving towards ex-post governance conditionality. Results show that debt relief is only weakly associated with subsequent improvements in economic performance but is correlated with increasing domestic debt which undermines the positive achievements in reducing external debt service. There is also evidence that donors are moving towards a more sensible allocation of debt forgiveness, rewarding countries which have better policies and institutions.