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dc.contributor.authorBerthélemy, Jean-Claudeen_US
dc.description.abstractIn 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 to be revisited in this context. First, the HIPC Initiative does not provide pure debt relief, but also creates new public spending obligations on poverty reduction programmes. Second, not all HIPCs can be considered as enjoying good economic governance, while the debt-overhang argument assumes a welfare-maximizing government. I show that standard positive incentives can be obtained only in good economic governance instances. I suggest that, in other instances, the outcome of HIPC programmes could be improved if external shocks were taken into account in their design.en_US
dc.publisherUNU-WIDER Helsinkien_US
dc.relation.ispartofseriesWIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2001/105en_US
dc.subject.keyworddebt overhangen_US
dc.subject.keywordsocial expenditureen_US
dc.titleHIPC debt relief and policy reform incentivesen_US
dc.typeWorking Paperen_US
Appears in Collections:WIDER Discussion Papers, United Nations University (UNU)

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