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The World's Poorest Countries: Debt Relief or Aid?

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  • Arslanalp, Serkan

    (Stanford U)

  • Henry, Peter B.

Abstract

Debt relief is unlikely to stimulate investment and growth in the nations being considered for debt relief under the highly indebted poor countries (HIPCs) initiative. This is because the HIPCs do not suffer from debt overhang. The principal obstacle to investment and growth in the HIPCs is a lack of the basic infrastructure that forms the foundation for profitable economic activity--property rights, roads, schools, hospitals, and clean water. The energy and resources currently devoted to the HIPC debt relief initiative could be more efficiently employed as direct foreign aid.

Suggested Citation

  • Arslanalp, Serkan & Henry, Peter B., 2003. "The World's Poorest Countries: Debt Relief or Aid?," Research Papers 1809, Stanford University, Graduate School of Business.
    • Handle: RePEc:ecl:stabus:1809
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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1809.pdf
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    References listed on IDEAS

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    Cited by:

    1. Guinnane, Timothy W., 2004. "Financial Vergangenheitsbewaltigung: The 1953 London Debt Agreement," Center Discussion Papers 28387, Yale University, Economic Growth Center.

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