![](/sites/default/files/styles/image_slider_1920x380/public/Events/Banner/banner-absreacr-microZAMOD-tanakawho.png?itok=LnO96EOu)
Blog
Surprises Ahead?![Placeholder](https://www.wider.unu.edu/sites/default/files/styles/expert_45x45/public/tony_addison_87363af4b3de300e5211e81b8d521d70.png?itok=-MPVkzbW)
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...
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...
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 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...
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 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...
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...
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...
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...
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...
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...
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...
by Ylmaz AkyüzIn this article I will discuss the potential of the Sovereign Debt Restructuring Mechanisms (SDRM), bearing in mind that we are dealing...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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 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...
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 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 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 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...
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...
Part of Book Fiscal Policy for Development
Since the mid-1980s Uganda has had debt strategies, which clearly laid down procedures for negotiating new loans and emphasized commitment to reduce the stock of debt arrears. Over this period, the country went through six Paris Club negotiations and...
The paper aims to enhance the existing literature on the debt-growth nexus by analysing the relationship in two separate country groups using the extreme bounds analysis for sensitivity tests and the mixed, fixed, and random coefficient approach that...
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...
The objective of this paper is to examine debt dynamics of highly indebted poor countries (HIPCs) and identify key factors responsible for their protracted debt crisis. For this purpose, we first evaluate economic conditions of debt sustainability in...
In 1970 the external debt of Tanzania, a least developed country, was 16.8 per cent of GDP and 58.6 per cent of exports. The ratio of per capita debt to per capita income was 14.4 per cent. By 2001 the debt had reached just over 100 per cent of GDP...
In the 1980s most of Sub-Saharan African countries (SSA) especially the HIPCs faced an unprecedented indebtedness. Different mechanisms of debt relief as well as economic reforms have been put in place with the objective of enabling these countries...
Of the 41 HIPCs, 11 are classified by the IMF and World Bank as conflict-affected. Can debt relief reduce the level of violent conflict in these countries? By providing additional resources to finance broad-based public spending, debt relief could...
This paper traces the origins of HIPC debt sustainability targets. These targets are interpreted as ‘switching values’, below which countries are expected to avoid debt service problems, but as such, they do not take into account that countries...
This paper assesses the preparation of Ghana’s Poverty Reduction Strategy paper (GPRS), paying particular attention to its likely influence on the institutionalisation of anti-poverty measures in the country’s political economy. After examining...
This paper considers some aspects of the effects of fiscal policy on macroeconomic adjustment in developing countries. First, the paper reviews the notion of the fiscal deficit in the particular context of developing countries. It then spells out the...
Success of the debt-relief HIPC and poverty-reduction PRSP initiatives demands annual growth rates of 5 percent sustained for fifteen years in Honduras. However, existing evidence on the impact of AIDS on economic growth in Africa raises concern on...
This paper studies the impact of uncertainty and debt crisis on the dynamics of the Mozambican economy over the last two decades. Investment boom and accelerated growth did not take place until peace and economic reforms were assured, helped by the...
After a massive international campaign calling attention to the development impact of foreign debt, the Heavily Indebted Poor Countries (HIPC) initiative is now underway. But will the HIPC Initiative meet its high expectations? Will debt relief...
Uganda is the first country to benefit from the 1996 Heavily Indebted Poor Countries (HIPC) Initiative, which offers a number of low-income countries an opportunity to negotiate a reduction of their external debt, and is utilizing the savings from...
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...
In this paper we discuss monetary and fiscal policy issues facing heavily-indebted poor countries (HIPCs) who receive debt reduction via the enhanced HIPC initiative. This debt relief program is distinguished from previous ones by its conditionality...
This paper examines the question if the Heavily Indebted Poor Country (HIPC) Initiative provides a good basis for the HIPCs to exit from repeated debt rescheduling. Building on other reviews of the HIPC Initiative, the paper begins with a short...
This paper discusses some issues on how to evaluate the impact of HIPC debt relief in the cases of Tanzania and Zambia using two computable general equilibrium models. Within our relatively simple model framework, we found that the macroeconomic...
Differences in economic and theological approaches to debt cancellation result from differences in disciplinary assumptions in respect of purpose, method, and argument. We argue that they provide alternative commentaries upon the need for debt...
In this paper, I discuss the incentives that the HIPC Initiative could create in debtor countries in favour of economic adjustment and reform. The usual debt-overhang argument, stating that debt relief will increase the net benefits of reforms, needs...
While growth has increased in Tanzania during the past five or six years, it is still too low to have a visible impact on poverty. Indeed, recent evidence suggests that the amounts of both income and non-income poverty are roughly the same as they...
This paper reviews the main obstacles to human and social development posed by the current external debt burdens of the least development countries. In particular, it analyses the shortcomings of the mechanisms and thresholds used to assess the...
This paper relates the challenge of debt and the opportunities of debt reduction to the task of achieving the Millennium Declaration Development Goals, major new benchmarks for progress in development and reduction in poverty, inspired by a series of...
After analysing present, unsuccessful strategies of granting too little too late, a fair, transparent arbitration process (FTAP) on debts modelled after the principles of US Chapter 9 insolvency for debtors with governmental powers (municipalities)...
A group of low-income countries classified as HIPCs have continued to experience difficulties in managing and servicing their huge stocks of external debt. Most of these countries including Kenya are in Sub-Saharan Africa. The relatively high level...
The HIPC initiative for debt relief in the poorest countries has been extended to cover more countries. Zambia is one the countries accepted under the enhanced initiative for a debt relief of US$ 3.8 billion. In this paper, the possible effects of...
This paper presents a review of the current debt problem in Ghana and assesses whether debt relief under the HIPC initiative can be effectively translated into poverty reduction. The extent of the debt burden is jeopardizing Ghana’s effort at poverty...
A critical task is to construct a development state-a set of democratically-accountable institutions capable of effective policy design and implementation. The new state agenda is ambitious and resource intensive. It cannot therefore be achieved...
This paper investigates poverty reduction strategy papers (PRSPs), launched by the International Monetary Fund/World Bank in 1999 as conditions for debt relief and loans. It queries whether PRSPs really represent a shift away from the controversial...
This paper investigates whether, and to what extent, the uncertainty with respect to the annual debt service payments may adversely affect economic growth of the group of highly indebted poor countries (HIPCs). We find supportive evidence for this...
The Millennium Development Goals (MDGs) now provide a clear set of objectives for mobilizing the international development community, notably in the area of development finance. The recent Millennium Project report recommends that high-income...
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...
Part of Journal Special Issue Aid Allocations and Development Financing
Part of Book Debt, Stabilization and Development
Part of Book Debt, Stabilization and Development
Part of Book Debt, Stabilization and Development
by Tony Addison This year is set to see a new chapter open in Africa’s debt story and, for once, it looks like a positive story—as the region begins...
It is predicted that the global financial crisis will negatively affect developing countries in Sub-Saharan Africa both through a reduction in Overseas Development Assistance (ODA) caused by the shrinking (or stagnating) of the economies of many...
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...
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...
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...
Rising public debt in sub-Saharan Africa remains a matter of concern. We provide an analysis of public debt and debt sustainability in Tanzania, focusing on external debt. Though current and previous analyses using the IMF-World Bank debt...
This paper examines the impact of debt forgiveness and debt relief on official development assistance. From the recipient side, the econometric analysis suggests that countries that received debt relief also received more aid compared to those that...
Part of Journal Special Issue Development Financing
Part of Journal Special Issue Aid Allocations and Development Financing
Part of Journal Special Issue Foreign Aid Heterogeneity
Part of Book Achieving the Millennium Development Goals
Part of Book From Conflict to Recovery in Africa
Part of Book Financial Openness and National Autonomy
Part of Book Debt Relief for Poor Countries