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...
This paper empirically examines South Africa’s fiscal sustainability through a Markov-switching model which utilizes quarterly datasets for the period from 1960 to 2019. The results show that public debt responds positively, demonstrating a...
Tony Addison Today, there is much frustration with the financial sector. Society’s precious savings are not being put to the best of uses—investing...
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...
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...
This paper examines the impact of foreign aid on public sector fiscal behaviour in Côte d’Ivoire. A special interest is the relationship between aid, debt servicing and debt, given that Côte d’Ivoire is a highly indebted country. The theoretical...
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...
Sub-Saharan Africa (SSA)’s public debt burden remains a challenge to development. Key drivers of public debt include large-scale financing of infrastructure development, adverse impact of multiple shocks including COVID-19 pandemic, maturity...
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...
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...
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...
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...
Tony Addison With six months remaining till the end of 2011, it’s time to take a peek into the near future. What can we expect? John Kenneth Galbraith...
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...
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...
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...
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...
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...
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...
Sustainable development is a long-term process, and as such must be examined carefully. Development implies structural changes of many different types, ranging from purely economic aspects to those affecting the personal circumstances of people...
Kenya’s external debt has continued to swell over the years, and despite the country meeting its debt commitment through regular servicing, this has been done at the expense of key social services such as health, education, water and sanitation...
This study critically reviews the education sector in Kenya and the challenges facing the sector in achieving universal primary schooling. The study argues that the introduction of cost-sharing system in Kenya has resulted in high dropout and...
This paper attempts to answer the following question: If the HIPC Initiative is fully successful and managed to write-off all debt that is owed by Africa, will the debt problem be over? The answer is ‘no’. This pessimist answer is arrived at by...
This paper looks at public sector debt in developing countries, being concerned specifically with the relationship between aid inflows and the public sector borrowing requirement net of aid loans. After examining the public sector budget constraint...
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...
This paper analyses debt relief efforts by creditors to alleviate the debt burden of low-income countries. The Heavily Indebted Poor Countries (HIPC) Initiative builds on traditional debt relief, and for the first time involves relief on multilateral...
This paper evaluates Cameroon’s foreign debt situation by analysing its evolution (structure, debt service payment, debt ratio, borrowing conditions, etc.). The analysis is extended by examining the internal debt situation, taking into account its...
In this paper we focus on the question: will the HIPC debt reduction programme help in the transformation of the development assistance business and change the rules of the ‘debt game’ in Africa? We concentrate on the donor and official creditor side...
The objective of this paper is to arrive at a better understanding of the implications of debt relief savings for poverty reduction in HIPC countries by focusing on one important channel of impact—human capital accumulation. Our simulation results...
The financing of Pakistan’s substantial current account deficits within the framework of IMF and the World Bank structural adjustment programmes—about 6 per cent of GDP in the early 1990s led to a debt crisis in the late 1990s. IMF considered this...
The Kenyan economy had a growth of –0.3 per cent in the year 2001, the lowest growth in the post-independence era. The dismal growth performance coincided with the period when the government was involved in grassroot consultations with civil society...
by Ylmaz AkyüzIn this article I will discuss the potential of the Sovereign Debt Restructuring Mechanisms (SDRM), bearing in mind that we are dealing...
Two factors make the Chilean experience of stabilization policies interesting. One is that probably no other government in Latin America (and perhaps also elsewhere) has been more diligent in pursuing liberal economic policies than the one which took...
Since joining the International Monetary Fund in 1945 as an original founding member, Egypt has signed four stabilization agreements with the Fund. These agreements were: a credit facility in May, 1962, which collapsed fairly rapidly; a stand-by...
Peru ran out of cash in July 1984; a year later President Garcia rejected an IMF agreement and limited debt service payments to 10 per cent of export earnings; and in mid-1986 the President said that Peru would pay 'when it chose and when it could1...
By the time Mexico declared a suspension of debt service payments in August 1982, it had already begun a process of external adjustment that was to prove in the short run outstandingly successful compared with that of other countries, but was based...
Three major phases of economic policy can be distinguished between 1980 and 1985: from 1980 to 1982, when the government reacted to deteriorating external conditions (the debt crisis and world recession) by liberalizing imports, relaxing fiscal...
Turkey is not the shining example of successful adjustment that it is often made out to be. The stabilization and adjustment policies followed since 1980 have actually undermined the structure of its economic development without correcting its...
From 1984 until its fall in February 1986 the Marcos government attempted to implement a standard IMF-type stabilization and adjustment programme. In some respects the programme was startlingly successful: inflation was brought under control and the...
Until the 1980s, the Ivory Coast seemed to be one of the most successful examples of economic development, enjoying sustained growth and rising per capita incomes. This process was, however, seen to be fragile in the 1980s when it was brought to an...
Argentina has had successive stabs at stabilization since the mid-1970s. Throughout most of this time it has had to wrestle with acute problems of hyperinflation, capital flight, rising external debt, a stop-go pattern of output, and for a long time...
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...
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