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External Debt in Post-Conflict Countries

Patricia Alvarez-Plata and Tilman Brück

No 613, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: In the development literature, there exists no systematic study of external borrowing in post-conflict countries. We address this gap by analyzing statistical and case study evidence from three African countries. We find that many war-affected countries face rising debt arrears and deteriorating relations with creditors. Rebuilding trust between lenders and borrowers is hence a crucial but often slow process. Furthermore, donors to war-affected African countries have been slow to grant exceptional debt relief based odious debt or on financial requirements. Debt relief for post-conflict reconstruction should embrace a more forward-looking and more generous conditionality.

Pages: 38 p.
Date: 2006
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