What does motivate lending and aid to the HIPCs?

Silvia Marchesi and Alessandro Missale
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Alessandro Missale: University of Siena; University of Milano

No 189, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

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 net 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 organisations and grants in exchange for loans from bilateral institutions. This evidence thus suggests that HIPCs have kept receiving large amounts of resources just because of their high indebtedness, thereby supporting both the hypothesis of defensive lending and defensive 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)
Date: 2004-08-01
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Citations: View citations in EconPapers (16)

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Working Paper: What does motivate lending and aid to the HIPCs? (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:189

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