DEBT RELIEF AND GOOD GOVERNANCE: NEW EVIDENCE OF DEVELOPING COUNTRIES FOR THE PERIOD 1990-2013

Andreas Freytag () and Julian Schmied

Applied Econometrics and International Development, 2019, vol. 19, issue 1, 15-32

Abstract: 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.

Keywords: Debt relief; Institutions; HIPC Initiative; MDRI; Governance. (search for similar items in EconPapers)
JEL-codes: F34 H53 H63 (search for similar items in EconPapers)
Date: 2019
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