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Have Debt Relief Initiatives Yielded Varying Effects in Resource and Non-resource Endowed Countries in Africa?

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Foreign Capital Flows and Economic Development in Africa

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Abstract

In 1996 the World Bank and International Monetary Fund initiated a series of debt relief programs for heavily indebted poor countries (HIPCs) to help them reduce multilateral public and publicly guaranteed debt and ensure a permanent exit from debt rescheduling. This chapter evaluates these programs’ impact on growth in Africa’s resource (RECs)- and non-resource (NRECs)-exporting HIPCs. We introduce a novel approach in which we measure debt relief initiatives by an interaction of debt service and dummy variables corresponding to the periods: pre-debt relief, pre-decision point, and post-decision point. Results reveal that debt relief initiatives enhanced growth in the pre-decision point period in NRECs while impeding in RECs. However, in post-decision point period, they increased growth across samples.

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Authors and Affiliations

  1. Birmingham-Southern College, Birmingham, AL, USA

    Esubalew Alehegn Tiruneh

  2. Pennsylvania State University, DuBois, PA, USA

    Evelyn Wamboye

Authors
  1. Esubalew Alehegn Tiruneh
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  2. Evelyn Wamboye
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Editors and Affiliations

  1. Pennsylvania State University, DuBois, PA, USA

    Evelyn Wamboye

  2. Birmingham-Southern College, Birmingham, Alabama, USA

    Esubalew Alehegn Tiruneh

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Tiruneh, E.A., Wamboye, E. (2017). Have Debt Relief Initiatives Yielded Varying Effects in Resource and Non-resource Endowed Countries in Africa?. In: Wamboye, E., Tiruneh, E. (eds) Foreign Capital Flows and Economic Development in Africa. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-53496-5_19

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  • DOI: https://doi.org/10.1057/978-1-137-53496-5_19

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  • Publisher Name: Palgrave Macmillan, New York

  • Print ISBN: 978-1-137-53495-8

  • Online ISBN: 978-1-137-53496-5

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