What Motivates Lending and Aid to the Hipcs?

Centro Studi Luca d'agliano No. 189

34 Pages Posted: 27 Feb 2005

See all articles by Silvia Marchesi

Silvia Marchesi

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS); Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS); University of Milan - Centro Studi Luca d'Agliano (LdA) ; Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

Alessandro Missale

University of Milan - Department of Business Policy and Economics

Date Written: October 2004

Abstract

We examine both grants and net loans made to low income countries during the last two decades to understand the main reasons that motivated the behaviour of both donors and creditors. We find that the total amount of net transfers to HIPCs, as compared to non-HIPCs, have been increasing with their debt level. Greater net transfers have taken the form of net loans from multilateral organisations and grants in exchange for loans from bilateral institutions. This evidence thus suggests that HIPCs have kept receiving large amounts of resources just because of their high indebtedness, thereby supporting both the hypothesis of defensive lending and defensive granting.

Keywords: Debt relief, Foreign aid, Highly indebted poor countries

JEL Classification: C23, F34, F35, O19

Suggested Citation

Marchesi, Silvia and Marchesi, Silvia and Missale, Alessandro, What Motivates Lending and Aid to the Hipcs? (October 2004). Centro Studi Luca d'agliano No. 189, Available at SSRN: https://ssrn.com/abstract=672262 or http://dx.doi.org/10.2139/ssrn.672262

Silvia Marchesi (Contact Author)

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy
+39 02 64483057 (Phone)

HOME PAGE: http://https://sites.google.com/site/ssilviamarchesi/home

University of Milan - Centro Studi Luca d'Agliano (LdA)

Via P. Amedeo 34
Milano, Mi 20122
Italy

Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

Alessandro Missale

University of Milan - Department of Business Policy and Economics ( email )

Via Conservatorio 7
I-20122 Milano
Italy

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