What does motivate lending and aid to the HIPCs?

Alessandro Missale and Silvia Marchesi ()
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Alessandro Missale: University of Milano - Department of Economics

International Finance from EconWPA

Abstract: We examine both grants and net loans made to low income countries during the last two decades to understand the main reasons that motivated the behaviour of both donors and creditors. We find that the total amount of transfers to HIPCs, as compared to non-HIPCs, have been increasing with their debt level. Greater net transfers have taken the form of net loans from multilateral organizations and grants in exchange for loans from bilateral institutions. The evidence thus suggests that HIPCs have kept receiving large amounts of resources just because of their high indebtedness, thereby supporting both the hypothesis of defencive lending and defencive granting.

Keywords: debt relief; foreign aid; highly indebted poor countries (search for similar items in EconPapers)
JEL-codes: C23 F34 F35 O19 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
Date: 2004-11-16
Note: Type of Document - pdf; pages: 33
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http://129.3.20.41/eps/if/papers/0411/0411006.pdf (application/pdf)

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Working Paper: What does motivate lending and aid to the HIPCs? (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpif:0411006

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