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Compensatory Aid and Debt Relief: A Case Study of Uganda

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  • Benno Ferrarini

Abstract

We propose a contingency financing framework to assist low-income countries in the achievement of debt sustainability. The framework relies on an accounting method to quantify external shocks to the balance of payments and provides compensatory financing to offset their impact. We apply the framework to the case of Uganda during the period 1988-2002 and find that it would have been highly effective in identifying and offsetting the adverse liquidity implications of shocks to the country's trade balance.

Suggested Citation

  • Benno Ferrarini, 2009. "Compensatory Aid and Debt Relief: A Case Study of Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 45(7), pages 1134-1149, August.
    • Handle: RePEc:taf:jdevst:v:45:y:2009:i:7:p:1134-1149
    DOI: 10.1080/00220380902811017
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    References listed on IDEAS

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    1. Paul Cashin & C. John McCDermott, 2002. "The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability," IMF Staff Papers, Palgrave Macmillan, vol. 49(2), pages 1-2.
    2. Collier, Paul & Dehn, Jan, 2001. "Aid, shocks, and growth," Policy Research Working Paper Series 2688, The World Bank.
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