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Debt Relief And Good Governance: New Evidence Of Developing Countries For The Period 1990-2013

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  • Andreas FREYTAG
  • Julian SCHMIED

Abstract

After the introduction of the HIPC Initiative in the early 2000s, indebted LICs had to show a decent governance performance before their debts were forgiven. We discuss the hypothesis that during the follow-up initiatives debt relief decisions refrained from this policy. We test different political economy theories by applying dynamic panel models to a set of debtor countries. We demonstrate that improvements in governance quality led to higher levels of debt forgiveness in 2000-2004, but not in the subsequent periods.

Suggested Citation

  • Andreas FREYTAG & Julian SCHMIED, 2019. "Debt Relief And Good Governance: New Evidence Of Developing Countries For The Period 1990-2013," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 19(1), pages 15-32.
    • Handle: RePEc:eaa:aeinde:v:19:y:2019:i:1_2
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    More about this item

    Keywords

    Debt relief; Institutions; HIPC Initiative; MDRI; Governance.;
    All these keywords.

    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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