Debt Relief: The Day After, Financing Low-Income Countries - Archive ouverte HAL
Communication Dans Un Congrès Année : 2022

Debt Relief: The Day After, Financing Low-Income Countries

Résumé

1 Debt Relief: The Day After, Financing Low-Income Countries Grégory Donnat* Anna Tykhonenko* Université Côte d’Azur, CNRS, GREDEG, France *Corresponding authors: gregory.donnat@univ-cotedazur.fr & anna.tykhonenko@univ-cotedazur.fr Abstract: In this paper, we investigate the factors of external public indebtedness for Low-Income Countries (LICs) and, as a modeling technique, we employ the iterative Bayesian shrinkage procedure to handle the differences between countries in panel data. Some LICs have benefited from two debt relief programs, the Heavily Indebted Poor Countries (HIPC) initiatives and the Multilateral Debt Relief Initiative (MDRI). We explore whether these debt reductions affect the access to external financing and credit markets of HIPCs. First, our estimation method highlights various debt dynamics across LICs from 1988 to 2018. Second, our results highlight a change in the relationships between external public indebtedness and its factors after the HIPC and MDRI. Unlike past debt reductions, most HIPCs keep borrowing, mainly from private creditors, even if the debt-to-GDP ratio increases. HIPCs’ access to credit markets does not suffer from a potential risk-aversion on the part of lenders, and is facilitated by their attractiveness to private investors.
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Dates et versions

hal-04298772 , version 1 (21-11-2023)

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  • HAL Id : hal-04298772 , version 1

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Anna Tykhonenko, Donnat Grégory. Debt Relief: The Day After, Financing Low-Income Countries. 38th International Symposium on Money, Banking and Finance, European Research Group (GdRE), Jun 2022, Strasbourg, France. ⟨hal-04298772⟩
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