Spatial Spillover Effects of Debt Relief from the Heavily Indebted Poor Countries (HIPC) Initiative

Joshua Hall, Serkan Karadas and Minh Tam Schlosky
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Serkan Karadas: Sewanee, The University of the South, Department of Economics
Minh Tam Schlosky: Sewanee, The University of the South, Department of Economics

No 16-23, Working Papers from Department of Economics, West Virginia University

Abstract: The impacts of various economic and institutional factors transcend the borders of a nation and flow over to adjacent countries. Past research has found that there are spatial spillovers in economic growth, development of institutions, governance quality and institutional quality. This paper conducts a study on the direct and indirect effects of debt relief from the Heavily Indebted Poor Country (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI) programs. The IMF and the World Bank provide debt relief to the member countries that have passed the Decision Point of the HIPC Process. Using the Spatial Durbin Model (SDM) model, this study shows that there are negative spatial spillovers of the impacts of being a HIPC member on neighboring countries.

Keywords: foreign aid; debt relief; HIPC; spatial spillovers; SDM model; SLX model (search for similar items in EconPapers)
JEL-codes: C31 F34 F35 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-12
New Economics Papers: this item is included in nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:wvu:wpaper:16-23

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