Research Brief
Debt
In the twentieth and early twenty-first centuries, debt crises have plagued low-, middle-, and high-income countries at various times. Indebted countries have generally addressed balance of payments crises either by (a) obtaining International...
Working Paper
Impacts of Africa's Growing Debt on its Growth
The main theme of this manuscript is to demonstrate that growth in Sub-Saharan African (SSA) countries has continued to decline under the burden of the foreign debt over the last fifteen years. After a decade of painful lost growth, the continent...
Working Paper
The International Debt Problem
The aim of this paper is to raise a few open questions and to bring to light some mismatches between existing theories and the evidence. (1) It is shown that many standard international debt models unwittingly require some agents to behave...
Working Paper
Debt Reduction
Working Paper
The Burden of Government Debt in the Indian States
In this paper we explore what impact, if any, government debts have on achieving the Millennium Development Goals for the Indian states. To fulfill the goals, national governments, especially in the developing world, have to undertake major...
Working Paper
Long-Term Growth and Welfare in Transitional Economies
This paper analyses the long-term growth and welfare impact of the transition to the market economy in the countries of Eastern Europe. We define welfare as the average real net wage after payments of social security contributions to fund a paygo...
Working Paper
Guinea-Bissau
In June 1998, Guinea-Bissau was thrown into conflict by a military revolt. This led to 11 months of fighting, extensive loss of life, and the displacement of up to a third of the country's population. This paper discusses the political economy of the...
Working Paper
Aid, Debt Relief and New Sources of Finance for Meeting the Millennium Development Goals
The Millennium Development Goals (MDGs) have lofty expectations regarding the impact of official development aid. Are these expectations valid? This paper surveys the literature on aid and growth. It finds that practically all aid studies since the...
Working Paper
The Intertemporal Effects of International Transfers
The classical transfer problem is studied in an overlapping generations framework, where the transfer is from a creditor country to a debtor country. A distinction is made between tax-financed and debt-financed transfers on the one hand, and between...
Working Paper
Sustainable and Excessive Current Account Deficits
The abundance of private capital flows confronts many emerging-market authorities with a transfer problem. They must decide whether to accept or resist the net capital inflow, or how much to accept and how much to resist. This paper aims at assisting...
Working Paper
Macro-financial implications of public debt in South Africa
This paper examines the role of financial frictions in the public debt–growth nexus, documenting that a public debt shock has different macro-financial implications dependent on the state of financial markets in South Africa. A non-linear vector...
Working Paper
The link between public debt and public investment in Tanzania
In a bid to realize its development aspirations, Tanzania has made concerted efforts to increase public investment, particularly in the last decade. A significant proportion of these investments are financed by contracting debt, manifested by the...
Working Paper
Debt-financed fiscal stimulus in South Africa
Debt-financed fiscal stimulus programmes directly stimulate aggregate demand through government expenditure or tax cuts, but their effectiveness is highly dependent on direct crowding out of private sector expenditure, spillover effects to the...
Working Paper
Aid and Policy Preference in Oil-Rich Countries
This paper analyses the role of foreign aid to assist development in two oil-rich countries: Indonesia and Nigeria. This paper seeks to understand the way foreign aid provided assistance to transform Indonesia from a ‘fragile’ state in the 1960s into...
Working Paper
On the Impact of External Debt and Aid on Public Expenditure Allocation in Sub-Saharan Africa after the Launch of the HIPC Initiative
In the wake of the current financial and economic crises, the economies of sub-Saharan Africa find themselves squeezed between likely reductions in official development assistance and the pressing challenge to eradicate poverty. Public expenditure...
Working Paper
Making Debt Relief Conditionality Pro-Poor
This paper considers how the conditionality inherent in HIPC debt relief should be constituted to promote pro-poor policies. There are two dimensions to this. First, the extent to which the policies proposed are pro-poor. Second, the potential for...
Working Paper
Aid Effectiveness, Debt Relief and Public Finance Response
Substantial amounts of debt relief have been granted to a set of low-income countries, as an alternative aid modality. Although the theoretical case for debt relief is firmly established, only empirical analysis can show whether debt relief is indeed...
Journal Article
Implications of the External Debt-servicing Constraint for Public Health Expenditure in Sub-Saharan Africa
The paper explores the implications of the external debt-servicing constraint for public health spending in sub-Saharan Africa (SSA), where the health challenges have been great and debt servicing particularly burdensome.Using 1975–94 5-year panel...
Journal Article
Fiscal Allocation for Education in Sub-Saharan Africa
Increasing attention is now being accorded to the importance of education within the framework of endogenous growth. Meanwhile, external debt servicing has appeared as a major constraint in many developing countries, especially in sub-Saharan Africa...
Journal Article
Debt Relief and Civil War
Reducing or writing off the debts of the 41 heavily indebted poor countries (HIPCs) can potentially reduce social conflict by releasing resources from debt-service to enable governments to make fiscal transfers that lower the grievances of rebels...
Journal Article
Aid and public sector borrowing in developing countries
This paper analyses the relationship between public sector borrowing and foreign development aid. It is concerned specifically with the public sector borrowing requirement net of aid, questioning the assumption that aid and this type of borrowing are...
Book
From Capital Surges to Drought
This collection analyses the new trends in capital flows to emerging markets since the Asian crisis, their determinants and policy implications. It explains why such flows have declined so dramatically in recent years, emphasising both structural and...
Book
Debt, Stabilization and Development
This volume consists of 18 essays dedicated to the memory of Carlos Diaz-Alejandro on topics that reflect his interests and contributions to the history and theory of international trade and economic development. The issues covered include historical...
Book
Financial Openness and National Autonomy
The authors of this book tackle the question of whether national policy autonomy is still possible, in the process challenging the new orthodoxy, and the dangers attendant upon deregulation. They explore the `political economy' of financial openness...
Working Paper
Conditionality: Facts, Theory and Policy
Three changes in conditionality of loans are proposed in this study, in order to improve the relations between developing country borrowers and international lending agencies, and make the international cooperative effort at development and stability...
Working Paper
The External Debt-Servicing Constraint and Public Expenditure Composition
The paper explores the impact of a binding external debt-servicing constraint on the sectoral composition of government expenditures in the economies of Africa, where this constraint has traditionally been most prevalent. Applying seemingly unrelated...
Working Paper
The Burden of Government Debt in the Indian States
In this paper we explore what impact, if any, government debts have on achieving the Millennium Development Goals for the Indian states. To fulfill the goals, national governments, especially in the developing world, have to undertake major...
Working Paper
Bankruptcy Proceedings for Sovereign State Insolvency and their Effect on Capital Flows
The paper examines the main issues involved in translating domestic bankruptcy procedures to the sovereign context. It considers some of the principles by which domestic bankruptcy procedures operate, and the extent to which they apply to...