Do Debt-Service Savings and Grants Boost Social Expenditures?

20 Pages Posted: 23 Aug 2006

See all articles by Alun H. Thomas

Alun H. Thomas

International Monetary Fund (IMF) - European Department

Date Written: July 2006

Abstract

This paper evaluates whether debt relief and grants can boost social expenditures in low-income countries. It finds that declines in debt-service help raise social expenditures, but no relationship between grants and social expenditures. Moreover, since the mid-1980s, low-income countries have managed to fully insulate social expenditures from the effects of budgetary tightening. The magnitude of the impact of these effects on social expenditures, however, is dwarfed by the resources needed to enable these countries to reach the Millennium Development Goals.

Keywords: Debt relief, grants, social expenditures, Millennium Development Goals

JEL Classification: F34, F35, H51, H52

Suggested Citation

Thomas, Alun, Do Debt-Service Savings and Grants Boost Social Expenditures? (July 2006). IMF Working Paper No. 06/180, Available at SSRN: https://ssrn.com/abstract=926235

Alun Thomas (Contact Author)

International Monetary Fund (IMF) - European Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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