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Debt Relief, Additionality, and Aid Allocation in Low Income Countries

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  • Mr. Robert Powell

Abstract

This paper models the resource implications of debt relief provided to low-income countries (LICs). Obtaining debt relief does not necessarily lead to individual aid-dependent countries receiving more overall resources from the donor community. Preliminary cross-section estimates suggest that debt relief provided to low-income countries in the period 1996 2000 neither crowded out other non-debt relief-related aid flows to the debtors concerned nor created significant extra net resources for those countries. While it is too early to fully assess the resource implications of the enhanced HIPC Initiative, this paper provides a possible approach to such an evaluation.

Suggested Citation

  • Mr. Robert Powell, 2003. "Debt Relief, Additionality, and Aid Allocation in Low Income Countries," IMF Working Papers 2003/175, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2003/175
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    References listed on IDEAS

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    Cited by:

    1. Daniel Cohen & Pierre Jacquet & Helmut Reisen, 2007. "Loans or Grants?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(4), pages 764-782, December.
    2. HEPP, Ralf, 2010. "CONSEQUENCES OF DEBT RELIEF INITIATIVES IN THE 1990s," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    3. Powell, Robert & Bird, Graham, 2010. "Aid and Debt Relief in Africa: Have They Been Substitutes or Complements?," World Development, Elsevier, vol. 38(3), pages 219-227, March.
    4. Welander, Anna, 2016. "Does Debt Relief Improve Child Health? Evidence from Cross-Country Micro Data," Working Papers 2016:29, Lund University, Department of Economics.
    5. Graham Bird & Dane Rowlands, 2007. "The IMF and the mobilisation of foreign aid," Journal of Development Studies, Taylor & Francis Journals, vol. 43(5), pages 856-870.
    6. Marchesi, Silvia & Missale, Alessandro, 2013. "Did High Debts Distort Loan and Grant Allocation to IDA Countries?," World Development, Elsevier, vol. 44(C), pages 44-62.
    7. Ugo Panizza, 2008. "The External Debt Contentious Six Years after the Monterrey Consensus," G-24 Discussion Papers 51, United Nations Conference on Trade and Development.
    8. Johansson, Pernilla, 2008. "Debt Relief, Investment and Growth," Working Papers 2008:11, Lund University, Department of Economics.
    9. Presbitero, Andrea F. & Zazzaro, Alberto, 2012. "IMF Lending in Times of Crisis: Political Influences and Crisis Prevention," World Development, Elsevier, vol. 40(10), pages 1944-1969.
    10. Ms. Yan M Sun, 2004. "External Debt Sustainability in HIPC Completion Point Countries," IMF Working Papers 2004/160, International Monetary Fund.
    11. Heylen, Fanny, 2010. "Analyzing the poverty impact of the enhanced Heavily Indebted Poor Countries (HIPC) initiative in Bolivia," Documentos de trabajo 1/2010, Instituto de Investigaciones Socio-Económicas (IISEC), Universidad Católica Boliviana.
    12. Ms. Sandra Marcelino & Ms. Ivetta Hakobyan, 2014. "Does Lower Debt Buy Higher Growth? The Impact of Debt Relief Initiatives on Growth," IMF Working Papers 2014/230, International Monetary Fund.
    13. Jie Yang & Dan Nyberg, 2009. "External Debt Sustainability in HIPC Completion Point Countries: An Update," IMF Working Papers 2009/128, International Monetary Fund.

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