From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club
Despite the frequency of official debt restructurings, little systematic evidence has been produced on their characteristics and implications. Using a dataset covering more than 400 Paris Club agreements, this paper aims to fill that gap. It provides a comprehensive description of the evolving characteristics of these operations and studies the economic dynamics surrounding them. The progressive introduction of new terms of treatment gradually turned the Paris Club from a mere debt collector into a sequenced provider of debt relief. The study finds that more generous restructuring conditions involving nominal relief are associated with higher economic growth. In contrast, agreements including only NPV relief have no positive impact on growth. However, the countries that get these restructuring conditions turn out to be more likely to pursue a prudent fiscal policy after the event than those receiving a nominal haircut. In other words, when deciding upon the type of relief to be granted through debt restructuring, the official sector faces a trade-off between the objectives of stimulating growth and fostering fiscal sustainability.
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Format: | Working Papers biblioteca |
Language: | English |
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Inter-American Development Bank
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Subjects: | Debt Restructuring, Fiscal Sustainability, Macroeconomy, Public Debt, GDP Growth, Fiscal Deficit, F33 - International Monetary Arrangements and Institutions, F34 - International Lending and Debt Problems, F36 - Financial Aspects of Economic Integration, F53 - International Agreements and Observance • International Organizations, H63 - Debt • Debt Management • Sovereign Debt, debt relief;debt restructurings;debt sustainability, |
Online Access: | http://dx.doi.org/10.18235/0000584 https://publications.iadb.org/en/debt-collection-relief-provision-60-years-official-debt-restructurings-through-paris-club |
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dig-bid-node-126652020-06-24T17:45:40ZFrom Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club 2017-01-06T00:00:00+0000 http://dx.doi.org/10.18235/0000584 https://publications.iadb.org/en/debt-collection-relief-provision-60-years-official-debt-restructurings-through-paris-club Inter-American Development Bank Debt Restructuring Fiscal Sustainability Macroeconomy Public Debt GDP Growth Fiscal Deficit F33 - International Monetary Arrangements and Institutions F34 - International Lending and Debt Problems F36 - Financial Aspects of Economic Integration F53 - International Agreements and Observance • International Organizations H63 - Debt • Debt Management • Sovereign Debt debt relief;debt restructurings;debt sustainability Despite the frequency of official debt restructurings, little systematic evidence has been produced on their characteristics and implications. Using a dataset covering more than 400 Paris Club agreements, this paper aims to fill that gap. It provides a comprehensive description of the evolving characteristics of these operations and studies the economic dynamics surrounding them. The progressive introduction of new terms of treatment gradually turned the Paris Club from a mere debt collector into a sequenced provider of debt relief. The study finds that more generous restructuring conditions involving nominal relief are associated with higher economic growth. In contrast, agreements including only NPV relief have no positive impact on growth. However, the countries that get these restructuring conditions turn out to be more likely to pursue a prudent fiscal policy after the event than those receiving a nominal haircut. In other words, when deciding upon the type of relief to be granted through debt restructuring, the official sector faces a trade-off between the objectives of stimulating growth and fostering fiscal sustainability. Inter-American Development Bank Gong Cheng Javier Díaz Cassou Aitor Erce Working Papers application/pdf IDB Publications en |
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Debt Restructuring Fiscal Sustainability Macroeconomy Public Debt GDP Growth Fiscal Deficit F33 - International Monetary Arrangements and Institutions F34 - International Lending and Debt Problems F36 - Financial Aspects of Economic Integration F53 - International Agreements and Observance • International Organizations H63 - Debt • Debt Management • Sovereign Debt debt relief;debt restructurings;debt sustainability Debt Restructuring Fiscal Sustainability Macroeconomy Public Debt GDP Growth Fiscal Deficit F33 - International Monetary Arrangements and Institutions F34 - International Lending and Debt Problems F36 - Financial Aspects of Economic Integration F53 - International Agreements and Observance • International Organizations H63 - Debt • Debt Management • Sovereign Debt debt relief;debt restructurings;debt sustainability |
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Debt Restructuring Fiscal Sustainability Macroeconomy Public Debt GDP Growth Fiscal Deficit F33 - International Monetary Arrangements and Institutions F34 - International Lending and Debt Problems F36 - Financial Aspects of Economic Integration F53 - International Agreements and Observance • International Organizations H63 - Debt • Debt Management • Sovereign Debt debt relief;debt restructurings;debt sustainability Debt Restructuring Fiscal Sustainability Macroeconomy Public Debt GDP Growth Fiscal Deficit F33 - International Monetary Arrangements and Institutions F34 - International Lending and Debt Problems F36 - Financial Aspects of Economic Integration F53 - International Agreements and Observance • International Organizations H63 - Debt • Debt Management • Sovereign Debt debt relief;debt restructurings;debt sustainability Inter-American Development Bank From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club |
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Despite the frequency of official debt restructurings, little systematic evidence has been produced on their characteristics and implications. Using a dataset covering more than 400 Paris Club agreements, this paper aims to fill that gap. It provides a comprehensive description of the evolving characteristics of these operations and studies the economic dynamics surrounding them. The progressive introduction of new terms of treatment gradually turned the Paris Club from a mere debt collector into a sequenced provider of debt relief. The study finds that more generous restructuring conditions involving nominal relief are associated with higher economic growth. In contrast, agreements including only NPV relief have no positive impact on growth. However, the countries that get these restructuring conditions turn out to be more likely to pursue a prudent fiscal policy after the event than those receiving a nominal haircut. In other words, when deciding upon the type of relief to be granted through debt restructuring, the official sector faces a trade-off between the objectives of stimulating growth and fostering fiscal sustainability. |
author2 |
Gong Cheng |
author_facet |
Gong Cheng Inter-American Development Bank |
format |
Working Papers |
topic_facet |
Debt Restructuring Fiscal Sustainability Macroeconomy Public Debt GDP Growth Fiscal Deficit F33 - International Monetary Arrangements and Institutions F34 - International Lending and Debt Problems F36 - Financial Aspects of Economic Integration F53 - International Agreements and Observance • International Organizations H63 - Debt • Debt Management • Sovereign Debt debt relief;debt restructurings;debt sustainability |
author |
Inter-American Development Bank |
author_sort |
Inter-American Development Bank |
title |
From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club |
title_short |
From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club |
title_full |
From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club |
title_fullStr |
From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club |
title_full_unstemmed |
From Debt Collection to Relief Provision: 60 Years of Official Debt Restructurings through the Paris Club |
title_sort |
from debt collection to relief provision: 60 years of official debt restructurings through the paris club |
publisher |
Inter-American Development Bank |
url |
http://dx.doi.org/10.18235/0000584 https://publications.iadb.org/en/debt-collection-relief-provision-60-years-official-debt-restructurings-through-paris-club |
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