Who Gets Debt Relief?

21 Pages Posted: 2 Aug 2006

See all articles by Nicolas M. Depetris Chauvin

Nicolas M. Depetris Chauvin

Princeton University - Department of Economics; Inter-American Development Bank (IADB)

Aart Kraay

World Bank - Development Research Group (DECRG)

Date Written: August 1, 2006

Abstract

The authors use preliminary results from an ongoing effort to construct estimates of debt relief to study its allocation across a sample of 62 low-income countries. They find some evidence that debt relief, particularly from multilateral creditors, has been allocated to countries with better policies in recent years. Somewhat surprisingly, conditional on per capita incomes and policy, more indebted countries are not much more likely to receive debt relief. But countries that have large debts especially to multilateral creditors are more likely to receive debt relief. The authors do not find much evidence that debt relief responds to shocks to GDP growth. Finally, most of the persistence in debt relief is driven by slowly changing country characteristics, indicating that it may be difficult for countries to exit from cycles of repeated debt relief.

Keywords: External Debt, Banks & Banking Reform, Strategic Debt Management, Foreign Direct Investment, Economic Theory & Research

Suggested Citation

Depetris Chauvin, Nicolas M. and Kraay, Aart, Who Gets Debt Relief? (August 1, 2006). World Bank Policy Research Working Paper No. 4000. Available at SSRN: https://ssrn.com/abstract=921390

Nicolas M. Depetris Chauvin

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

HOME PAGE: http://www.princeton.edu/~depetris

Inter-American Development Bank (IADB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Aart Kraay (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-5756 (Phone)
202-522-3518 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/akraay

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