Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27514 
Year of Publication: 
2008
Citation: 
[Journal:] Economics: The Open-Access, Open-Assessment E-Journal [ISSN:] 1864-6042 [Volume:] 2 [Issue:] 2008-30 [Publisher:] Kiel Institute for the World Economy (IfW) [Place:] Kiel [Year:] 2008 [Pages:] 1-28
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
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.
Subjects: 
External debt
HIPC
debt relief
economic growth
JEL: 
F34
H63
O11
C33
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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