Debt relief and good governance: new evidence of developing countries for the period 1990-2013

• Andreas Freytag ^[1] ; Julian Schmied ^[2]
  1. [1] Stellenbosch University

     Stellenbosch University

     Stellenbosch, Sudáfrica

     
  2. [2] Max Planck Institute for Demographic Research

     Max Planck Institute for Demographic Research

     Kreisfreie Stadt Rostock, Alemania

     
• Localización: Applied econometrics and international development, ISSN 1578-4487, Vol. 19, Nº. 1, 2019, págs. 15-32
• Idioma: inglés
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• Resumen

  • 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