The Impact of External Indebtedness on Poverty in Low-Income Countries

26 Pages Posted: 28 Jan 2006

See all articles by Boileau Loko

Boileau Loko

International Monetary Fund (IMF)

Montfort Mlachila

International Monetary Fund (IMF)

Raj Nallari

affiliation not provided to SSRN

Kadima Kalonji

affiliation not provided to SSRN

Date Written: March 2003

Abstract

This paper explores the relationship between external debt and poverty. A number of observers have argued that high external indebtedness is a major cause of poverty, Using the first-differenced general method of moments (GMM) estimator, the paper models the impact of external debt on poverty, measured by life expectancy, infant mortality, and gross primary enrollment rates, while duly taking into account the impact of external debt on income. The paper thus endeavors to bring together the literature that links external debt with income growth and poverty. The main conclusion is that once the effect of income on poverty has been taken into account, external indebtedness indicators have a limited but important impact on poverty.

Keywords: Poverty, Growth, External Debt

JEL Classification: I3, N1, F34

Suggested Citation

Loko, Boileau and Mlachila, Montfort and Nallari, Raj and Kalonji, Kadima, The Impact of External Indebtedness on Poverty in Low-Income Countries (March 2003). IMF Working Paper, Vol. , pp. 1-26, 2003. Available at SSRN: https://ssrn.com/abstract=879136

Boileau Loko (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Montfort Mlachila

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Raj Nallari

affiliation not provided to SSRN

No Address Available

Kadima Kalonji

affiliation not provided to SSRN

No Address Available

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