The Debt-Growth Nexus in Poor Countries: A Reassessment

Artikel

The paper investigates the relationship between external debt and economic growth, focusing on the role played by the policy and institutional framework. Results for a panel of 114 developing countries show that the debt-growth nexus depends on institutions and policies. The Debt-Laffer curve looses statistical significance once institutional quality is controlled for and debt overhang seems to be at work exclusively in countries with sound institutions. On the contrary, external debt proves to be irrelevant for countries with weak institutions. A policy implication is that efficient debt relief policies should be tailored to country-specific characteristics and conditional to a certain level of institutional quality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economics: The Open-Access, Open-Assessment E-Journal ; ISSN: 1864-6042 ; Volume: 2 ; Year: 2008 ; Issue: 2008-30 ; Pages: 1-28 ; Kiel: Kiel Institute for the World Economy (IfW)

Classification and Topics

• Classification: Wirtschaft ; International Lending and Debt Problems ; National Debt; Debt Management; Sovereign Debt ; Macroeconomic Analyses of Economic Development ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: External debt ; HIPC ; debt relief ; economic growth ; Auslandsverschuldung ; Wirtschaftswachstum ; Schuldenerlass ; HIPC (Heavily Indebted Poor Countries) ; Schätzung ; Entwicklungsländer

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Presbitero, Andrea F.
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2008

Further information

• DOI: doi:10.5018/economics-ejournal.ja.2008-30
• Handle: http://hdl.handle.net/10419/27514
• Last update: 10.03.2025, 11:43 AM CET