Journal articles on the topic 'Debt relief – Developing countries'
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Freytag, Andreas, and Gernot Pehnelt. "Debt Relief and Governance Quality in Developing Countries." World Development 37, no. 1 (January 2009): 62–80. http://dx.doi.org/10.1016/j.worlddev.2008.01.004.
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Arslanalp, Serkan, and Peter Blair Henry. "Policy Watch: Debt Relief." Journal of Economic Perspectives 20, no. 1 (February 1, 2006): 207–20. http://dx.doi.org/10.1257/089533006776526166.
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At the Gleneagles summit in July 2005, the heads of state from the G-8 countries—the United States, Canada, France, Germany, Italy, Japan, Russia and the United Kingdom—called on the International Monetary Fund (IMF), the World Bank and the African Development Bank to cancel 100 percent of their debt claims on the world's poorest countries. The world's richest countries have agreed in principle to forgive roughly $55 billion dollars owed by the world's poorest nations. This article considers the wisdom of the proposal for debt forgiveness, from the standpoint of stimulating economic growth in highly indebted countries. In the 1980s, debt relief under the “Brady Plan” helped to restore investment and growth in a number of middle-income developing countries. However, the debt relief plan for the Heavily Indebted Poor Countries (HIPC) launched by the World Bank and the International Monetary Fund in 1996 has had little impact on either investment or growth in the recipient countries. We will explore the key differences between the countries targeted by these two debt relief schemes and argue that the Gleneagles proposal for debt relief is, at best, likely to have little effect at all. Debt relief is unlikely to help the world's poorest countries because, unlike the middle-income Brady countries, their main economic difficulty is not debt overhang, but an absence of functional economic institutions that provide the foundation for profitable investment and growth. We will show that debt relief may be more valuable for Brady-like middle-income countries than for low-income ones because of how it leverages the private sector.
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Eaton, Jonathan. "Debt Relief and the International Enforcement of Loan Contracts." Journal of Economic Perspectives 4, no. 1 (February 1, 1990): 43–56. http://dx.doi.org/10.1257/jep.4.1.43.
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It is now apparent that the governments of many developing countries will not repay their debts as initially contracted. Creditors and creditor governments must now adjust to the realization that full repayment is either infeasible or that enforcing full payment is undesirable from the point of view of creditor countries as a whole. The question now is what to do with these debts. The Baker and Brady plans have increased U.S. government involvement in the debt crisis and have allocated public money toward its resolution. The Kenen plan, discussed in this issue, proposes still more public involvement and, in all likelihood, more public money. Each of these plans is an ad hoc response to the impasse that has arisen between some highly indebted countries and their private creditors, and aspects of each plan may help resolve this impasse. But none of these plans confronts the features of international capital markets that led to the crisis in the first place. My argument here is that the debt crisis that began in 1983 arose from defects in how international capital markets operated the previous decade. A goal of any redesign of the institutions involved in these markets should be not only to resolve the current crisis, but to keep it from happening again.
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Kocha, Chukwunenye N., Marshal Iwedi, and James Sarakiri. "The Dynamic Impact of Public External Debt on Capital Formation in Sub-Saharan Africa: The Pooled Mean Group Approach." Journal of Contemporary Research in Business, Economics and Finance 3, no. 4 (December 23, 2021): 144–57. http://dx.doi.org/10.33094/26410265.2021.34.144.157.
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The increasing reliance on public external debt stocks in Africa and other developing countries has raised the question of debt sustainability, especially in the face of Covid-19, which has forced many counties (both developed and developing) into an unforeseen and unplanned recession. This study contributes to the literature on debt sustainability by examining the effect of public debt on capital formation in Sub-Saharan Africa (SSA) from 2000 to 2008 using the pooled mean group estimation approach. The debt variables considered are external debt stock, debt service on external debt, and interest payment on external debt. Consistent with the overhang theory, our results show that increasing external debt stock and interest payment on external debts only have a marginal impact on capital formation in the short run and exerts a serious negative effect in the long run. Our results also show that debt service burden has a positive effect on gross fixed capital formation in the long run. Therefore, we argue that despite being faced with a huge debt service burden resulting from large external debt stock, SSA countries are not neglecting investments in critical infrastructures needed to drive economic growth. However, we recommend that increasing government revenue base, minimizing economic waste associated with public expenditure, and intensifying negotiations for debt relief may be a plausible way out.
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Gamel, Kelsey, and Pham Hoang Van. "The short and long run effects of debt reduction." Journal of Asian Business and Economic Studies 25, no. 1 (June 11, 2018): 144–62. http://dx.doi.org/10.1108/jabes-04-2018-0008.
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Purpose The purpose of this paper is to estimate benefits to debt reduction by using the natural experiment provided by the debt relief programs: the Heavily Indebted Poor Countries Initiative launched by the International Monetary Fund and World Bank in 1996 and the Multilateral Debt Relief Initiative extension in 2005. Design/methodology/approach The authors apply a time-shifted difference-in-differences strategy to evaluate the effects of this intervention. The date of each country’s decision to participate in the program is used as one treatment point while the date of the completion of the debt relief program is used as another treatment point. The exercise compares different economic outcomes such as domestic and foreign investment, schooling, and employment of the treated observations to the counterfactual of untreated country-years. The period between the decision and completion points is a short run while the period after the completion point is considered a long run. Findings The authors found that debt relief increased capital investment as much as 1.63 percent in the short run and 5.79 percent in the long run. However, there was no effect on foreign direct investment suggesting that debt overhang does not affect incentives of foreign investors. Output and schooling enrollment increased both in the short and long run. Originality/value This paper exploits a natural experiment of debt relief in a number of developing countries to shed light on the possible benefits to debt reduction. The authors are able to separate the short- and long-run effects of debt reduction. The finding that domestic but not foreign investment responds to debt reduction is suggestive of the differences in incentives across these two sources of investment.
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Bublyk, Yevhen, Svitlana Brus, and Oleksii Shpanel-Yukhta. "Prospects and obstacles to the restructuring of Ukraine’s external state obligations in the conditions of war." Ekonomìka ì prognozuvannâ 2022, no. 2 (June 30, 2022): 7–28. http://dx.doi.org/10.15407/eip2022.02.007.
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The article analyzes the structure of Ukraine’s external debt liabilities for the period from 2011 to 2021 and in the period since the beginning of the full-scale invasion. It is determined that the amount of state external liabilities, taking into account projected data, may exceed 70% of this country’s GDP, which will become the dominant form of both attracting financial resources to the state budget and threatening the state security. The authors provide an assessment of the difficulties of restructuring the external debt in terms of the specific weight of the creditor and the weight of short-term payments for the period 2022-2023. It is concluded that at the beginning of 2022, the largest specific weight in the structure of external liabilities was the debt for issued securities for foreign markets and liabilities to international financial organizations and the EU. The main payments for them fall on the third quarters of 2022 and 2023 (3.0 and 3.6 billion USD, respectively), and the payment of interest accounts for 30% of total. The article considers possible mechanisms of write-off and restructuring of the state's external debts, taking into account international experience and with regard to the crises and military conflicts. The following mechanisms for write-off and restructuring of foreign debt are analyzed: Brady Plan for debt restructuring of developing countries; and debt relief programs for the poorest countries - HIPC (heavily indebted poor countries) and MDRI (The Multilateral Debt Relief Initiative). The authors identify the guidelines of work on minimizing Ukraine's external liabilities in 2022-2023. A conclusion is made regarding the initiation of negotiations on the restructuring and write-off of the external debt burden to ease the payments on external debts, including GDP warrants. Such a task should be carried out as soon as possible before the period of the largest payments and taking into account the existing support of the governments of leading foreign countries.
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Bublyk, Yevhen, Svitlana Brus, and Oleksii Shpanel-Yukhta. "Prospects and obstacles to the restructuring of Ukraine’s external state obligations in the conditions of war." Economy and forecasting 2022, no. 2 (October 10, 2022): 5–24. http://dx.doi.org/10.15407/econforecast2022.02.005.
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The article analyzes the structure of Ukraine’s external debt liabilities for the period from 2011 to 2021 and in the period since the beginning of the full-scale invasion. It is determined that the amount of state external liabilities, taking into account projected data, may exceed 70% of this country’s GDP, which will become the dominant form of both attracting financial resources to the state budget and threatening the state security. The authors provide an assessment of the difficulties of restructuring the external debt in terms of the specific weight of the creditor and the weight of short-term payments for the period 2022-2023. It is concluded that at the beginning of 2022, the largest specific weight in the structure of external liabilities was the debt for issued securities for foreign markets and liabilities to international financial organizations and the EU. The main payments for them fall on the third quarters of 2022 and 2023 (3.0 and 3.6 billion USD, respectively), and the payment of interest accounts for 30% of total. The article considers possible mechanisms of write-off and restructuring of the state's external debts, taking into account international experience and with regard to the crises and military conflicts. The following mechanisms for write-off and restructuring of foreign debt are analyzed: Brady Plan for debt restructuring of developing countries; and debt relief programs for the poorest countries - HIPC (heavily indebted poor countries) and MDRI (The Multilateral Debt Relief Initiative). The authors identify the guidelines of work on minimizing Ukraine's external liabilities in 2022-2023. A conclusion is made regarding the initiation of negotiations on the restructuring and write-off of the external debt burden to ease the payments on external debts, including GDP warrants. Such a task should be carried out as soon as possible before the period of the largest payments and taking into account the existing support of the governments of leading foreign countries.
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Tsvirko, Svetlana Eduardovna. "The state of global public debt and new approaches towards debt management." Теоретическая и прикладная экономика, no. 3 (March 2021): 46–57. http://dx.doi.org/10.25136/2409-8647.2021.3.36610.
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This article is devoted to the state of public global public debt and new approaches towards its regulation in both developed and developing countries. The subject of this research is public debt in different groups of countries. Analysis of the situation with global public debt and the peculiarities of its regulation is necessary to learn positive foreign experience for its possible application in Russia. The following factors of significant increase of public debt are outlined: severe reduction of economic activity and decline in government revenue; increase of public spending, including related to anti-crisis measures; growing primary deficit, and this, the need to increase borrowings. The countries with low and middle income additionally face significant capital outflows from their financial markets, devaluation of national currencies, and difficulties with debt refinancing. Analysis is conducted on the structure and dynamics of public debt that developed due to the COVID-19 pandemic. The author describes the risks associated with public debt. It is noted that many developed countries were able to adjust their financial operations in response to the growing need for borrowed funds: change the existing mechanisms for entering the debt market; amend the practice of conducting auctions government securities auctions. Developing countries need debt restructuring. The conclusion is made that the debt relief process requires new approaches towards debt management, including new methods of risk mitigation, enhanced control aimed at countering “credit bubbles”; clear regulation of debt restructuring observed by all creditors.
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Husain, Aasim Mairaj. "Forgiveness, Buybacks, and Exit Bonds: An Analysis of Alternate Debt Relief Strategies." Pakistan Development Review 27, no. 4II (December 1, 1988): 819–28. http://dx.doi.org/10.30541/v27i4iipp.819-828.
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The 1980s have seen the issue of Third World debt rise to prominence as one of the foremost concerns for economic policy-makers. The foreign indebtedness of many developing countries has risen to such high levels that the casual observer is forced to wonder if the debt will ever be paid back. Many scholars are now arguing that the debt obligations of some of the most heavily indebted countries (HICs)are so large that they act as a severe disincentive to investment. These disincentives, in turn, reduce growth rates in the HICs, thereby making future repayments even less likely. Many explanations for the onslaught of the debt crisis have been offered. The late Seventies and early Eighties saw a rapid rise in interest rates as well as an equally rapid deterioration of the terms of trade of many HICs. Many sovereign debtors, which had been excellent investment opportunities for creditor banks, were suddenly insolvent. Low output shocks further exacerbated repayment possibilities. Faced with the possibility of non-payment, creditors entered into rescheduling negotiations with sovereign borrowers. These rescheduling have involved bargaining over the amount of repayment that will be made.
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Horn, Sebastian, Carmen M. Reinhart, and Christoph Trebesch. "Hidden Defaults." AEA Papers and Proceedings 112 (May 1, 2022): 531–35. http://dx.doi.org/10.1257/pandp.20221002.
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China's lending boom to developing countries is morphing into defaults and debt distress. Given the secrecy surrounding China's loans, the associated defaults remain “hidden,” as missed payments and restructuring details are not disclosed. We construct an encompassing dataset of sovereign debt restructurings with Chinese lenders and find that these credit events are surprisingly frequent, exceeding the number of sovereign bond or Paris Club restructurings. Chinese lenders follow a resolution approach reminiscent of 1980s Western lenders; they seldom provide deep debt relief with face value reduction. If history is any guide, multiyear debt workouts with serial restructurings lie in store.
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Ben Ali, Tarek, and Bandar Ben Abdul Aziz Al Yahya. "The effect of governance on public debt: an empirical investigation for the Arabian Gulf countries." Journal of Economic Studies 46, no. 4 (August 5, 2019): 812–41. http://dx.doi.org/10.1108/jes-07-2017-0168.
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Purpose The question of public debt management for both developed and developing economies has created an enormous amount of political as well as academic interest. The purpose of this paper is to examine how governance affects public debt accumulation in the Arabian Gulf countries during the period between 1996 and 2015 period. The six Worldwide Governance indicators (WGI) (voice and accountability (VAA), political stability and the absence of violence/terrorism, government effectiveness (GEFF), regulatory quality (RQ), rule of law (RL) and control of corruption) were used to measure the quality of governance in these countries. The results show that an increase in every governance indicator except control of corruption leads to a decrease in public debt. Design/methodology/approach The authors estimate a dynamic specification of debt to GDP ratio to study how governance affects public debt accumulation in the Arabian Gulf countries during the 1996–2015 period. The dependent variable in this study is the ratio of public debt to GDP. This study relies on the six measures of institution’s quality given by the WGI. These variables are the VAA, political stability and absence of violence (PSAV)/terrorism, GEFF, RQ, RL and control of corruption. Additional control variables are also incorporated to account for the omitted variables bias. These include the rate of inflation (Al-Marhubi, 2000) and the independent variable lagged one period. The study of the statistical relationship between institutional quality and public debt allows us to quantify the direct effect of governance on public debt, which is the effect that goes through an increase in spending or a reduction in fiscal revenues and not through a decrease in GDP growth. The econometric estimation is carried out using panel fixed effects and GLS random effects. Findings The estimation results confirm the core hypothesis, which considers that the poor governance in a country the higher is the ratio of public debt to GDP, ceteris paribus. Indeed, five of the worldwide Governance Index are negatively correlated with public debt ratio. These indices are GEFF, VAA, PSAV, RQ and RL. Empirical findings for other independent variables are consistent with those of empirical studies in the literature. The coefficient on the independent variable per capita income has the theoretically expected negative sign and it is highly statistically significant, implying that the higher the per capita income in a country, the lower the ratio of public debt. The independent variable government expenditure has the theoretically expected positive sign suggesting that the higher the government expenditure, the higher the ratio of public debt. The education variable has negative but not statistically significant coefficients. The independent variables (inflation, unemployment rate and lag debt ratio) have the expected signs and are highly statistically significant, implying that the higher their value in a country, the higher the ratio of public debt to GDP. Having the theoretically expected effect, the GDP growth variable is negatively correlated with public debt ratio but its coefficients are not statistically significant. Originality/value Although the literature on the damaging effects of poor governance on growth is abundant (Tanzi and Davoodi, 2002; Mauro, 1996; Mo, 2001; Mauro, 1996; Brunetti et al., 1997; Campos et al., 1999; Al-Marhubi, 2000; Depken and Lafountain, 2006; Mauro, 1998), only very recently the relationship between institutional quality and public debt accumulation has been addressed. By reviewing the research on political and institutional determinants of public debt, it was found that there are few studies, which have examined regional differences, and even fewer ones have focused on the countries of the Gulf Cooperation Council (GCC). Therefore, this paper aims to fill the gap by focusing on this economic region. Furthermore, when studying the relationship between the quality of institutions and the accumulation of public debt, existing studies focus only on corruption index and neglect other determinants of governance. Thus, a second contribution of the study is to investigate how institution quality, through the six WGI, affects public debt accumulation. Furthermore, given the recent rise in public debt in GCC countries, an increasingly important question is what policy actions do these countries need to take to ensure that their debt will be sustainable and will not overwhelm their financial system? we can add: while there has been much attention given to the political and economic explanations of public debt accumulation in developing and developed countries on a global scale, scholars so far have not focused on this debate in high income oil producers.
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Dubas-Jakóbczyk, Katarzyna, and Anna Kozieł. "Towards Financial Sustainability of the Hospital Sector in Poland—A Post Hoc Evaluation of Policy Approaches." Sustainability 12, no. 12 (June 12, 2020): 4801. http://dx.doi.org/10.3390/su12124801.
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In Poland, as well as in many other countries around the world, hospitals constitute the cornerstone of health care provision. In 2020, hospitals stand at the frontline of the fight with the coronavirus pandemic, and are facing huge pressures. The issue of supporting the financial sustainability of the hospital sector has become especially important. The objectives of this study were to: (1) Provide a retrospective evaluation of the reforms aimed at improving the financial sustainability of hospitals in Poland, adopted and implemented within the last two decades (2000–2019), and (2) identify the main drivers of hospitals’ financial standing. A longitudinal analysis (2003–2018) of the stock of public hospital debt in Poland was also conducted. Methods applied included statistical data analysis and literature review. Results indicate that diverse top-down approaches (debt-relief programs with restructuration or corporatization elements as well as hospital network reform) provided limited results in terms of the improvement of the individual hospitals’ financial standing. The reasons for the reforms’ failures were mixed. Public hospitals operate under a unique and complex system of regulations with diverse external stakeholders and/or determinants influencing hospital revenues and cost generation. A more comprehensive and evidence-based approach is needed in developing policies aimed at supporting hospitals’ financial sustainability in Poland.
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Desalegn, Goshu, Anita Tangl, and Maria Fekete-Farkas. "From Short-Term Risk to Long-Term Strategic Challenges: Reviewing the Consequences of Geopolitics and COVID-19 on Economic Performance." Sustainability 14, no. 21 (November 3, 2022): 14455. http://dx.doi.org/10.3390/su142114455.
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The COVID-19 crisis and the war between Russia and Ukraine affects the world economy badly. The western countries’ economic sanctions on Russia and the Russian government’s reverse sanctions on western countries create pressure on the world economy. This study was conducted to investigate how the economic performance is responding to COVID-19 and the geopolitical crisis of the era. In doing so, both theoretical and numerical data reviews have been performed. The objective of the study is to investigate the short-term risks and long-term strategic challenges of the crisis. The study used a bibliometric approach with the help of RStudio software. The Web of Science database was used for extracting the resources in line with the grey literature from the Google Search engine. A total of 895 documents were utilized in this bibliometric analysis. At the same time, secondary panel data extracted from the international monetary fund (IMF) for a period of 4 years (2019–2022) were utilized for reviewing numerical implications. The purposive sampling technique is used for data selection and main economic variables. The findings of the study imply that countries over the world registered less economic growth, high inflation rate, and high government debt in 2022 compared to the fiscal period of 2019–2021. The emerging economies and developing countries of Europe were badly affected by the crisis as the level of inflation rate hit 27 percent and the economic growth of the region registered a negative 2.9 percent. The study also found rising interest rates, exchange rate volatility, risk of stagflation, and rising energy prices are the short-term risks to economies. The issue of sustainable development goals and green aspects, risk of hyperinflation, and risk of economic recession are the long-term strategic challenges or risks to economies. Bailout and debt relief were found to be necessary for those countries badly affected by the crisis. Policymakers should facilitate financial policies and should switch from general assistance to targeted support of viable enterprises.
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Altamura, Carlo Edoardo. "The Paradox of the 1970s: The Renaissance of International Banking and the Rise of Public Debt." Journal of Modern European History 15, no. 4 (November 2017): 529–53. http://dx.doi.org/10.17104/1611-8944-2017-4-529.
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The Paradox of the 1970s: The Renaissance of International Banking and the Rise of Public Debt The 1970s is a paradoxical decade. On the one hand, it marked the gradual demise of the industrial society and the end of the «Golden Age» of capitalism. On the other hand, the decade saw the renaissance of international banking and finance after almost half a century of retreat, thanks to the explosive growth of the Eurodollar market. International banking, which had remained dormant since the 1930s, gradually re-emerged from its ashes as banking institutions started to reconsider their domestic orientation. The growth of the Eurodollar market and the process of banking internationalisation were crucially accelerated by the first oil crisis when private commercial banks replaced public institutions in the intermediation of capital flows between surplus and deficit countries with Eurobonds and, especially, Euroloans. Foreign borrowing provided a relief to nearly all the problems that the monetary and energy crisis had aggravated or created. The side effect to that panacea was the delegation of increasing power to the banking and financial sectors by «privatising» the monetary and financial circuit, and by tying once and for all the destiny of the developing world to the interests of commercial banks. The paper will address the paradox of the 1970s to argue that a clear link exists between the industrial crisis and the renaissance of finance.
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Bouchet, Michel, and Bertrand Groslambert. "An empirical study of the relationships betwen corruption, capital leakages and country risk: part I." Cuadernos de difusión 11, no. 20 (June 30, 2006): 63–73. http://dx.doi.org/10.46631/jefas.2006.v11n20.01.
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This paper investigates the relationship between corruption and capital flight in developing countries. Part I tackles the challenge of defining and measuring capital flight, as well as the various root causes of expatriated savings. Our research contributes to the corruption and capital market literature in several ways. First, the issue of capital flight has attracted less attention than that of external capital inflows in emerging market countries. In particular, capital flight has kept a low profile in academic circles until the late 1990s. In addition, research often looks at capital flight as a portfolio issue, and very few studies consider corruption as a «push factor». Second, our paper looks at why capital flight deserves renewed interest, as the globalization of financial markets broadens investment diversification opportunities for domestic residents. Increasingly, official agencies express concern regarding the recycling of generous development aid flows and heavy borrowing in the international capital markets outside the developing countries’ economies. In the aftermath of the G-7 1996 Cologne meeting, larger and broader debt relief, coupled with a strong emphasis on sustainable development policies, focuses on the urgency of capital flight repatriation. Third, we assume that corruption combines two kinds of centrifugal forces for capital leakages: corruption-driven money leaves a country because of fear of being caught by the tax and judiciary authorities; in addition, money leaves a country because of fear that a corrupt government will not provide a stable and conducive environment for safe savings and profitable investment. In Part II of our research, we test the assumption that the higher the level of corruption, the less conducive the national environment for private investment, and the greater the capital leakages.
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Lewis, Clint T. "Climate Change and the Caribbean: Challenges and Vulnerabilities in Building Resilience to Tropical Cyclones." Climate 10, no. 11 (November 18, 2022): 178. http://dx.doi.org/10.3390/cli10110178.
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Caribbean Small Island Developing States (SIDS) is one of the most vulnerable regions in the world to the impacts of climate change. The region has prioritized adaptation to climate change and has implemented many adaptation actions over the past 20 years. However, the region is becoming increasingly vulnerable to the impacts of tropical cyclones (TC). This paper analyses the impacts of TC on the region between 1980 to 2019. It aims to examine the economic loss and damage sustained by the region, identify the sectors most impacted, and ascertain the perspectives of key stakeholders on the factors that hinder building resilience. Statistical analysis techniques and semi-structured interviews were to unpack and understand the dataset. The paper finds that economic loss and damage has gradually increasing between 1980 to 2009 with a drastic increase between 2010 to 2019. The paper highlights the agriculture, housing, transport, and utility sectors as the most impacted. The findings also call to attention the need for increased access to adaptation financing for SIDS, the disadvantages of the income status that hinders building resilience, and the need for increased Early Warning Systems. The paper recommends revising the per capita national income as an eligibility criterion for accessing concessional development finance assistance, a comprehensive EWS for the countries in the region, and consideration of debt relief for countries affected by TC.
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Stoian, Andreea, Laura Obreja Brașoveanu, Iulian Brașoveanu, and Bogdan Dumitrescu. "A Framework to Assess Fiscal Vulnerability: Empirical Evidence for European Union Countries." Sustainability 10, no. 7 (July 16, 2018): 2482. http://dx.doi.org/10.3390/su10072482.
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Following the financial crisis of 2007 and the sovereign debt crisis in 2010 that affected the soundness and reduced the strength of public finance in European countries, there has been a growing interest in developing methodologies to the help assess and signal the vulnerability of fiscal policy. Therefore, the aim of this study is to develop a new framework (V-L-D) to assess fiscal vulnerability. V-L-D represents a new methodology on the measurement of fiscal vulnerability that relies on the assumption that vulnerability can occur even during calm times. In comparison with previous methodologies that studied fiscal vulnerability around crisis and fiscal distress times, our framework investigates fiscal vulnerability near fiscal adjustments episodes. Our methodology relies on two distinct indicators: one showing the vulnerabilities indicated by the level of the cyclically adjusted budget balance and distance-to-stability, and one showing the vulnerabilities pointed out through the changes of the cyclically adjusted budget balance and public debt. V-L-D is able to classify fiscal vulnerability into five distinct categories having scores from 0 (no fiscal vulnerability) to 4 (extreme fiscal vulnerability). Using annual data ranging over 1990–2013 for 28 European Union countries, we evidenced 310 episodes of fiscal vulnerability, out of which 128 episodes of low vulnerability, 94 of moderate, 62 of strong, and 26 of extreme fiscal vulnerability. We also found that over 2004–2013, Greece, Portugal, Romania, United Kingdom, Ireland, Spain, and Slovenia were the most fiscally vulnerable countries in the Union. United Kingdom and Greece went through the longest episodes of fiscal vulnerability, counting 12 and 11 consecutive years, respectively. We tested our framework’s effectiveness against the Excessive Deficit Procedure. We found that the overall performance is good: V-L-D assessed moderate fiscal vulnerability during the procedure, strong fiscal vulnerability in the first year when procedure was initiated, and extreme vulnerability one year before the initiation.
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Larionova, Marina. "Saving the SDGs? Strengthening partnership for achieving SDGs in the Post-Covid-19 Digital World." International Organisations Research Journal 15, no. 4 (December 1, 2020): 163–88. http://dx.doi.org/10.17323/1996-7845-2020-04-08.
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The 2020, intended to give a good start to the Decade of Action to achieve SDGs by the target date of 2030, became a year of unprecedented health, social and economic crisis. The COVID-19 pandemic plunged the world into the worst global recession since the Great Depression, reversed progress across the full range of the SDGs jeopardizing the Agenda 2030 implementation. To build back better it is vital to assess the COVID-19 pandemic impact on economic growth and sustainable development and reflect on how to reenergize partnerships for saving the SDGs. This article aims to assess the COVID-19 pandemic impact on economic growth and sustainable development and offer recommendations on international cooperation and partnerships for saving the SDGs. It article reviews estimates of the triple crisis toll on the goals implementation. It then looks at the key international institutions’ initiatives to support developing countries in their response to the pandemic and associated economic shocks. The article concludes by outlining priorities for strengthening international cooperation on sustainable development which include incorporation of key components of digitalization into the SDGs as concrete targets and indicators and a comprehensive G20-led debt relief initiative providing for the released funds allocation to poverty and inequality eradication, health and education - related SDGs.
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Gnangnon, Sena Kimm. "Trade space and trade policy: an empirical assessment." Journal of Economic Studies 45, no. 3 (August 13, 2018): 498–520. http://dx.doi.org/10.1108/jes-02-2017-0033.
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Purpose The purpose of this paper is to examine the behavior of governments in terms of trade policy design when they experience a lack of foreign resources from international trade after ensuring the sustainability of their external debt. To do so, the paper defines two concepts of trade space: “De Facto Trade Space” and “De Jure trade space.” Design/methodology/approach To conduct this study, the author relies on a panel data set comprising 109 countries over the period 1998–2014. To perform the empirical analysis, the author has mainly used the system generalized methods of moments approach. Findings The empirical analysis suggests evidence that trade space matters significantly for trade policy. Indeed, “De Facto Trade Space” is consistently associated with greater trade policy liberalization, with this positive effect being higher, the higher the development level – proxied by the real per capita income – of the concerned country. “De Jure Trade Space” tends to lead to greater trade policy liberalization in less advanced developing countries, but is associated with the adoption of trade restrictive measures in more advanced countries. Additionally, results suggest different impacts on trade policy of “Positive De Jure Trade Space” and “Negative De Jure Trade Space.” Research limitations/implications These findings suggest that the trade space, as defined in this study, plays a key role in trade policy design by policymakers. Practical implications The current study shows that trade space could significantly matter for trade policy design by policymakers. Originality/value To the best of the author’s knowledge, this is the study dealing directly with the “trade space” concept as well as its impact on trade policy.
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Hernández Contreras, Jorge, Antonio Ponce Rojo, Pedro Moreno Badajós, and Adriana Castañeda Barajas. "DESARROLLO DE COMPETENCIAS PARA LA INVESTIGACIÓN EN ESTUDIANTES DE EDUCACIÓN SUPERIOR: UNA EXPERIENCIA EN MÉXICO." Revista Cognosis. ISSN 2588-0578 3, no. 1 (February 27, 2018): 43. http://dx.doi.org/10.33936/cognosis.v3i1.1153.
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El desarrollo de competencias para la investigación en estudiantes de Educación Superior es una tarea ardua. Sin embargo, la formación de recursos humanos en investigación debe ser una de las tareas permanentes de las Universidades, esto debido a que posibilita a los países en desarrollo el poder acceder a mejores niveles de bienestar social en materia de crecimiento económico, producción de ciencia, tecnología y mejora de la calidad educativa. El presente reporte muestra los resultados del esfuerzo de los últimos 12 años del Centro Universitario de los Lagos de la Universidad de Guadalajara, quien tiene como eje fundamental la investigación y como parte inherente el desarrollo de competencias en investigación en estudiantes universitarios. Esperando que dichos recursos humanos que han sido formados en la investigación en un mediano y/o largo plazo vengan a incrementar, enriquecer y realizar el relevo generacional de los investigadores en la región centro occidente de México.
PALABRAS CLAVE: Competencias; Investigación; Incorporación Temprana; Universidad.
DEVELOPMENT OF COMPETENCIES FOR RESEARCH IN HIGHER EDUCATION STUDENTS: AN EXPERIENCE IN MEXICO
ABSTRACT
The formation of human resources in research is an arduous task for Public Universities, especially in developing countries, must become a fundamental axis in reaching higher levels of social welfare in the matter of economic growth, production of science and technology and improvement of quality of education. At the moment a great disparity exists where developed countries, are “the unique” producers of knowledge and the developing countries are only consumers. In this work, we present the results of the effort of the last 12 years in the University of Guadalajara at Lagos de Moreno, which its fundamental axis is the scientific research. Like inherent part of the formation of university students, they will increase, enrich and to became in to the generational relief of the researchers in Jalisco state and perhaps of the Mexican Republic.
KEYWORDS: Education; Investigation; Educational Resources; Higher Education.
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Rybczynski, Tadeusz. "Developing countries' debt." Round Table 76, no. 302 (April 1987): 154–66. http://dx.doi.org/10.1080/00358538708453803.
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Matviienko, N., and V. Matviienko. "FACTORS OF DEVELOPMENT OF TOURISM IN CROATIA." Bulletin of Taras Shevchenko National University of Kyiv. Geography, no. 72 (2018): 81–88. http://dx.doi.org/10.17721/1728-2721.2018.72.14.
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International tourism is gaining increasing influence on the country’s competitiveness in the world markets. The article is dedicated to Croatia, one of the most successful countries in the former Yugoslav republic. Its disintegration became one of the world’s national conflicts, where many human bloods were shed, by the way, it is similar to that which Ukraine is going through today. The Croats managed to put an end to the separatist conflict, embark on a plan for economic stability and enter the European Union. It was investigated that tourism was one of the priority development areas that the country focused on. It is determined that Croatia is one of the most important tourist destinations in the Mediterranean region, and the tourism industry is developing successfully and generating a stable income. The article considers the system of factors which became the prerequisite for the development of the tourist industry in Croatia. Their role in the development of the modern tourism industry in Croatia has been characterized. The main natural-geographical factors are investigated – relief, climate, water factor and nature reserve fund. It is determined that the advantage of Croatia is not only the clean and warm Adriatic sea but also the availability of thermal waters and mineral springs, as well as a unique natural reserve fund. The significance of human-geographical factors – socio-geographical position, historical-geographical, demographic, cultural-historical, level of socio-economic development, material and technical base and transport factors are revealed. Interestingly, the accession of Croatia to the EU was not prevented either by the territorial problems that the country had with Slovenia, nor the restrained attitude of the population towards European integration, nor the external debt of the country, which exceeded the crisis mark for the European Union. An analysis of the level of economic development in Croatia showed that Croatia had become one of the poorest countries of the EU at the time of its accession to this organization. The analysis of the main indicators of socio-economic development of the country in 2017 showed that today Croatia has become a very attractive European country, which tourists are willing to visit. The basis of Croatia’s economy is the service sector, whose share in the country’s GDP is 70.8%, of which direct revenue from tourism is 10.9%. The key factor in the development of tourism in Croatia is the material and technical base. In particular, the system of accommodation of Croatia for quality and service is not inferior to other European countries. Roads are the most modern and safe in Europe. The importance of tourism development in Croatia for the ecological and geographical factor is analyzed. It has been determined that an effective system of governance has been created in Croatia for the protection of the environment. Effective state tourism policy contributes to improving the attractiveness of Croatia in the tourist market and accelerates integration processes in the world economy.
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Sharma, Shalendra D. "Debt Relief for the Poorest: An Assessment of the Heavily-Indebted Poor Countries (HIPC) Initiative." International Studies Review 5, no. 2 (September 28, 2004): 63–80. http://dx.doi.org/10.1163/2667078x-00502004.
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High level of external debt poses a serious constraint on the ability of poor countries to pl.ll.'SUe sustainable development and reduce poverty. The Heavily Indebted Poor Countries (HIPC) Initiative was designed to relieve the high external debt of some of the world's poorest nations by either writing-off or reducing debt to sustainable levels. It was launched by the World Bank and the International Monetary Fund (IMF) in 19% and "enhanced" in 19()9 to expand and accelerate the process of debt relief and free scarce public resources fur sustainable economic development, in particular, broad based development to reduce poverty. Whether debt relief, in general, or the HIPC Initiative, in particular, can achieve such development outcomes has been the subject of much debate. 1bis paper argues while the HIPC initiative is a positive step towards debt relief and sustainability, it is important to note that sustainable debt is not an end in itself, but should be an essential element in realizing the growth needed to reduce poverty and achieve the Millennium Development Goals (MDGs). To realize the full potential of debt relief, donor countries will not only have to be more generous, and the recipient countries need to undertake deeper structural reforms, debt sustainability assessments should specifically take into account how the poor countries can achieve the MDGs.
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Scholl, Almuth. "Debt Relief for Poor Countries: Conditionality and Effectiveness." Economica 85, no. 339 (November 29, 2016): 626–48. http://dx.doi.org/10.1111/ecca.12216.
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Koeda, Junko. "A Debt Overhang Model for Low-Income Countries: Implications for Debt Relief." IMF Working Papers 06, no. 224 (2006): 1. http://dx.doi.org/10.5089/9781451864847.001.
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Adaobi, Elota. "FOREIGN AID, DEBT RELIEF AND AFRICA’S DEVELOPMENT: PROBLEMS AND PROSPECTS." International Journal of Advanced Research in Global Politics, Governance and Management 2, no. 1 (September 3, 2020): 18–35. http://dx.doi.org/10.48028/iiprds/ijargpgm.v2.i1.02.
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In recent years, the Paris club granted a number of African countries, including Nigeria, debt relief. This elicited widespread celebration in the capital cities of affected countries, where it was portrayed asaveritable launchpad to Africa’s development.This paper takes a critical look at the debt relief, with emphasis on its problems and prospects for Africa’s development. It is argued that while debt relief does offer some prospects for development, there is little or no evidence to suggest that such an outcome is automatic. The conditions that precipitated the debt crisis in the first instance, including an inequitable international economic order and political conditions tied to aid, are still very present in the debt relief regime. Corruption of the foreign aid regime by both internal and external actors has been compounded by the recent global economic crisis, posing further constraints on the effectiveness of foreign aid in Africa. If debt relief must yield the desired result, it has to be accompanied by a sustainable campaign to fundamentally reform the world order to make it more equitable, together with a drive for good governance that is not only democratic, but also efficient and development-oriented in Africa.
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Cappelen, Alexander W., Rune Jansen Hagen, and Bertil Tungodden. "National Responsibility and the Just Distribution of Debt Relief." Ethics & International Affairs 21, no. 1 (March 2007): 69–83. http://dx.doi.org/10.1111/j.1747-7093.2007.00061.x.
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The Highly Indebted Poor Countries (HIPC) initiative is the largest multilateral effort aimed at providing debt relief. In this essay, we address the question of whether this program is consistent with a view of justice commonly known as liberal egalitarianism. We argue that the HIPC initiative violates two basic liberal egalitarian principles. More generally, we show why the debate on debt relief must move beyond a discussion of whether or not countries should be held responsible for their sovereign debt. We urge a more careful and broader classification of which of the factors affecting a country's situation it should be held responsible for and which it should not. While there are good arguments for sometimes not holding poor countries responsible for their sovereign debt, it is hard to see why the same arguments should not also apply to many other factors that affect a country's net disposable income.
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Bird, Graham, and Alistair Milne. "Debt relief for poor countries: Distinguishing rhetoric from reality." New Economy 7, no. 4 (December 2000): 199–204. http://dx.doi.org/10.1111/1468-0041.00160.
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Ferry, Marin, Marc Raffinot, and Baptiste Venet. "Does debt relief “irresistibly attract banks as honey attracts bees”? Evidence from low-income countries’ debt relief programs." International Review of Law and Economics 66 (June 2021): 105978. http://dx.doi.org/10.1016/j.irle.2021.105978.
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Innocents Edoun, Emmanuel, and Dikgang Motsepe. "Critical assessment of Highly Indebted Poor Countries (HIPIC) Initiative in Africa and the Implication of the New Partnership for Africa’s Development (NEPAD) (2001-2016): a theoretical perspective." Investment Management and Financial Innovations 13, no. 3 (October 10, 2016): 380–86. http://dx.doi.org/10.21511/imfi.13(3-2).2016.10.
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Many African countries have been struggling to achieve sustainable economics in order to contribute in putting Africa in the path for socio-economic development. This is partly due to the burden of debt that hangs over many African countries that borrowed funds from multilateral partners irresponsibly. As a result of this, the International Monetary Fund (IMF) and the World Bank put in place in 1996 a strategy to provide debt relief to countries that were struggling to repay their debts. This debt relief initiative was reviewed in 1999 to provide adequate results. This paper is, therefore, a critical assessment of HIPIC and the implication of NEPAD from 2001 to date. Keywords: HIPIC, NEPAD, IMF, World Bank, socio-economic development. JEL Classification: H62, H63
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International Monetary Fund. "Malawi: Debt Relief at the Heavily Indebted Poor Countries Initiative Completion Point and Under the Multilateral Debt Relief Initiative." IMF Staff Country Reports 06, no. 420 (2006): 1. http://dx.doi.org/10.5089/9781451828139.002.
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Ahsan, Diya Abdul Hussain. "The External Debt Problem of Developing Countries." Business Inform 10, no. 513 (2020): 36–49. http://dx.doi.org/10.32983/2222-4459-2020-10-36-49.
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The article is aimed at researching the problem of external debt of developing countries. The current status of external debt of developing countries is analyzed. The growing demand for investors, combined with the growing number of firms looking to take on large debts, has led to a deterioration in underwriting standards and the credit quality of such loans. The grounded relevance of the use of borrowing resources today is not necessarily a bad thing, even on the contrary – it is one of the most effective ways to stimulate the growth of the economy. When these resources are used targeted and efficiently, they generate more revenue for the borrower. But this gets worse when loans are used inefficiently, that is when they stimulate excessive consumption rather than bring in additional benefits. The author concluded that the reasons for the current fears began long before the crisis of 2008. A debt is not a bad instrument if it is used to finance investments that make a profit or create assets that are worth more than the debt itself. It’s hard to find such data, but if we trace the tendency of global growth and compare it to the tendency of debt accumulation, we’ll see that doesn’t happen. Therefore, it seems that the situation is out of control, i.e., debts continue to accumulate, excessive accumulation of loan portfolios increases, and low interest rates imply the survival of companies and countries. This leads to liquid risks with the expiration of the debt repayment period. Governments have been addicted to increased loans – none of the more developed economies could cope with a possible tightening of monetary policy. This means that when the time comes to severely lower the credit shoulder, economic growth will suffer. Central banks, in turn, find themselves trapped because maintaining such loose monetary policy and a high credit shoulder poses a risk of forming the price bubbles. It is determined that while rates remain at current low levels, investors will be looking for a bigger return, which means taking more risk – this, in turn, could trigger the «butterfly effect», causing destruction to the entire financial system.
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Hussein Zeaiter. "Sovereign debt defaults: Evidence from developing countries." Journal of Economic Research (JER) 20, no. 2 (August 2015): 199–229. http://dx.doi.org/10.17256/jer.2015.20.2.003.
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Dooley, Michael P. "Debt management and crisis in developing countries." Journal of Development Economics 63, no. 1 (October 2000): 45–58. http://dx.doi.org/10.1016/s0304-3878(00)00099-7.
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Shepherdson, Ian. "Debt Swapping in Developing Countries: A Correction." Journal of Development Studies 26, no. 3 (April 1990): 522–23. http://dx.doi.org/10.1080/00220389008422168.
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Krueger, Anne O. "Developing countries' debt problems and growth prospects." Atlantic Economic Journal 14, no. 1 (March 1986): 8–19. http://dx.doi.org/10.1007/bf02303506.
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Krueger, Anne O. "Origins of the developing countries' debt crisis." Journal of Development Economics 27, no. 1-2 (October 1987): 165–87. http://dx.doi.org/10.1016/0304-3878(87)90013-7.
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Thugge, Kamau, and Anthony R. Boote. "Debt Relief for Low-Income Countries and the HIPC Initiative." IMF Working Papers 97, no. 24 (1997): 1. http://dx.doi.org/10.5089/9781451844108.001.
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Powell, Robert. "Debt Relief, Additionality, and Aid Allocation in Low Income Countries." IMF Working Papers 03, no. 175 (2003): 1. http://dx.doi.org/10.5089/9781451858778.001.
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Romero-Barrutieta, Alma Lucía, Aleš Bulíř, and José Daniel Rodríguez-Delgado. "The dynamic implications of debt relief for low-income countries." Review of Development Finance 5, no. 1 (June 2015): 1–12. http://dx.doi.org/10.1016/j.rdf.2014.07.003.
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Bulir, Ales, Alma Romero-Barrutieta, and Jose Daniel RodrÃguez-Delgado. "The Dynamic Implications of Debt Relief for Low-Income Countries." IMF Working Papers 11, no. 157 (2011): 1. http://dx.doi.org/10.5089/9781455293711.001.
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Wamboye, Evelyn, and Kiril Tochkov. "External debt relief initiatives and economicgrowth in least developed countries." Journal of Developing Areas 50, no. 2 (2016): 213–29. http://dx.doi.org/10.1353/jda.2016.0077.
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Oggier, Fernando. "The Effectiveness of Debt Relief: Assessing the Influence of the HIPC Initiative and MDRI on Tanzania’s Health Sector." American Journal of Undergraduate Research 16, no. 2 (September 30, 2019): 31–44. http://dx.doi.org/10.33697/ajur.2019.021.
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Debt relief initiatives have been part of the international development sphere since the early 1990s. With the launch of the Heavily Indebted Poor Country (HIPC) Initiative in 1996 and the Multilateral Debt Relief Initiative (MDRI) in 2005 many countries have been able to successfully qualify for debt relief. Tanzania has been one of the primary beneficiaries of debt relief over the years. While empirical evidence demonstrates that the country’s economic growth has been positively impacted by debt relief initiatives, other aspects of human development need to be analyzed to ensure a comprehensive assessment of the HIPC Initiative and the MDRI. This study compiles Tanzania’s health data into a composite indicator to perform a graphical analysis to compare the trends between health outcomes and external debt. The graphical analysis is contextualized through a qualitative analysis of political, economic and health financing literature from the Bank of Tanzania, UNICEF and USAID. The results indicate that there health outcomes improved throughout the whole study’s time period particularly after the HIPC Initiative. The health financing literature also points to increased development expenditure during this period. Nonetheless, the effects of debt relief seem to diminish in the long-term due to fluctuations in external donors and logistical barriers to budget execution. Tanzania also continues to face socio-economic and geographic disparities in health outcomes and funding. Some of the literature also states that the country’s weak system of checks and balances and the lack of robust institutions could cause opportunistic policy preferences that might not necessarily improve Tanzania’s health outcomes. KEYWORDS: Child Mortality Rate; Debt Relief; External Debt; Heavily Indebted Poor Country Initiative; International Monetary Fund; Life Expectancy; Maternal Mortality Rate; Multilateral Debt Relief Initiative; Official Development Aid; Prevalence of Undernourishment
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ERDOGAN, Seyfettin, and Vedat CENGIZ. "EXTERNAL DEBT IN DEVELOPING COUNTRIES AND DEBT REDUCTION TECHNIQUES IN 1990s." Ekonomik Yaklasim 14, no. 46 (2003): 107. http://dx.doi.org/10.5455/ey.10374.
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Pairault, Thierry. "L'endettement des pays de L'UEMOA à l'égard de la Chine." Revue Internationale des Économistes de Langue Française 6, no. 2 (2021): 37–50. http://dx.doi.org/10.18559/rielf.2021.2.2.
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The 2020 health situation has compelled the IMF and the World Bank to publish information that was otherwise not made public to justify debt relief for countries whose debt levels might be deemed too dangerous. In this context, where everything is said to praise or demonise Chinese financing in Africa, we are just trying to gather the available data, particularly the newly published data, to question the real debt burden of the eight WAEMU countries towards China, and the significance of this debt for development strategies.
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Wijayanti, Rani, and Sagita Rachmanira. "Early Warning System for Government Debt Crisis in Developing Countries." Journal of Central Banking Theory and Practice 9, s1 (July 1, 2020): 103–24. http://dx.doi.org/10.2478/jcbtp-2020-0025.
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AbstractThis study develops an early warning signal (EWS) of government debt crisis using a panel data consisting of 43 developing countries over the period of 1960 to 2017. It employs two different methods: the noise to signal ratio to capture the signaling power of individual indicators; and the binomial logistic regression to construct a more general model. The binomial logistic regression offers a better predictive power relative to the noise to signal ratio. The binomial logistic regression can predict 61.5% of the government debt crisis 2 years in advance. An increase in inflation, government and private debt exposures, external debt to exports, ratio of short-term external debt to foreign exchange reserves, and the ratio of external interest payments to gross national income can signal an upcoming debt crisis. Similarly, a continuous decline in the gross domestic product (GDP) and government consumption also increase the likelihood of government debt crisis.
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Shahid, Muhammad, Mahmood Shah, and Bibi Aisha Sadiqa. "Foreign Debt and Debt Servicing Relief Effect Implications in Pakistan: A Poverty Reduction Strategy." Global Economics Review IV, no. IV (December 30, 2019): 34–45. http://dx.doi.org/10.31703/ger.2019(iv-iv).03.
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The study interrogates the critical thresh hold limit of the external debt where the highly indebted economy becomes hanged and stagnant, pushes the economy towards. deeper poverty even below the poverty line. The other horizon aspect of relief in debt servicing is attributed to American and Russian war of 80s and war on the terror against Afghanistan after 9/11 forced the debt issuing agencies like Paris and Non-Paris Club and other lending aliened countries rescheduled and cut down debt servicing of Pakistan. This study examined the foreign debt effect on poverty by assuming dataset over the period from 1984 to 2017. The ARDL to co integration Approach was applied to get the findings that after debt thresh hold limit and debt overhang point, the foreign debt causes poverty in case of Pakistan. The other dimension if relief in debt servicing is provided this economic action depressed poverty.
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Kenen, Peter B. "Organizing Debt Relief: The Need for a New Institution." Journal of Economic Perspectives 4, no. 1 (February 1, 1990): 7–18. http://dx.doi.org/10.1257/jep.4.1.7.
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In March 1989, the new U.S. Secretary of the Treasury, Nicholas Brady, endorsed a change in strategy for dealing with developing country debt, calling for a three-year waiver of clauses in existing loan agreements that stand in the way of debt reduction “to accelerate sharply the pace of debt reduction and pass the benefits directly to the debtor nations,” and called on the IMF and World Bank to use some of their policy-based lending to aid the debt-reducing process. Events moved rapidly thereafter. Is there anything left to argue about? Unhappily, yes. Advocates of debt relief, like myself, maintain that the Brady plan will not go far enough. It relies too heavily on debtors and creditors to strike mutually beneficial bargains; it does not provide enough resources to generate the deep debt reductions that debtors need to solve their problems; and it does not shift risk forthrightly enough from private lenders to official creditors. I would correct the defects of the Brady plan by creating a new international institution to manage and finance the debt-reducing process or assign the task to an existing institution but give it enough resources to get the job done.
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Ahiadorme, Johnson Worlanyo. "Unpleasant surprises? Debt relief and risk of sovereign default." Journal of Financial Economic Policy, January 6, 2023. http://dx.doi.org/10.1108/jfep-12-2022-0294.
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Purpose The Covid-19 pandemic has rekindled interest in sovereign debt crises amidst calls for debt relief for developing and emerging countries. But has debt relief lessened the debt burdens of emerging and developing economies? The purpose of this paper is to empirically address this question. In particular, the focus is on the implications of debt relief and institutional qualities for sovereign debt in emerging and developing economies. Design/methodology/approach The model extends the framework on the probability of default by incorporating the receipt of debt relief by a debtor country. Doing so allows to better explain movements of sovereign defaults relating to debt relief. The model is estimated via the regular probit regression. Findings The analysis shows that the debt relief provided, thus, far, failed to ease the debt overhang problems of developing and emerging countries and reduced investment. The current debt relief schemes may underscore the prospects of self-enforcing and self-fulfilling sovereign debt crises rather than eliminating the dilemma completely. Regarding the forms of debt relief, the analysis shows that debt forgiveness offers favourable prospects in terms of debt sustainability and economic outcomes than debt rescheduling. Perhaps, the sovereign debt crises, particularly in low-income countries, hinge on insolvency problems rather than transitory illiquidity issues. Practical implications Any debt relief mechanism should consider seriously the potential incentive effect that reinforces expectations of future debt-relief initiatives. Importantly, solving the sovereign debt problem requires a programme for sustained investment and economic growth, while not discounting the critical role of prudent debt management policies and institutions. Originality/value This study contributes a different angle to the debate on sovereign debt distress. Aside from the structural and economic factors, this study investigates the role of debt management policy in the debtor nation and the implications of debt relief benefits for sovereign risk. The framework also focuses on whether the different forms of debt relief exert distinctive impacts.
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Green, Keith. "The Fragile Panacea of Debt Relief for Developing Countries." SSRN Electronic Journal, 2005. http://dx.doi.org/10.2139/ssrn.1493350.
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