Debt Relief and Beyond: Lessons Learned and Future Challenges Book

Preface xiii

Acknowledgments xv

Contributors xvii

Abbreviations xxi

Introduction Dörte Dömeland Carlos A. Primo Braga 1

Part I Debt Relief 9

1 Debt Relief to Low-Income Countries: A Retrospective Boris Gamarra Malvina Pollock Carlos A. Primo Braga 11

2 Debt Relief and Education in Heavily Indebted Poor Countries Jesús Crespo Cuaresma Gallina Andronova Vincelette 35

3 Is Debt Relief Good for the Poor? The Effects of the HIPC Initiative on Infant Mortality Juan Pedro Schmid 49

4 Drivers of Growth in Fragile States: Has the HIPC Process Helped Fragile Countries Grow? Luca Bandiera Jesús Crespo Cuaresma Gallina Andronova Vincelette 71

Part II Debt Sustainability 91

5 Debt Sustainability in Low-Income Countries: Recent Experience and Challenges Ahead Christian Beddies Dörte Dömeland Marie-Hélène Le Manchec Henry Mooney 93

6 Debt Relief and Sustainable Financing to Meet the MDGs Dörte Dömeland Homi Kharas 117

7 Sovereign Default Risk and Private Sector Access to Capital in Emerging Markets Udaibir S. Das Michael G. Papaioannou Christoph Trebesch 141

8 Lessons from Market-Access Countries on Public Debt Sustainability and Growth Brian Pinto Mona Prasad 181

Part III Odious Debt 203

9 The Concept of Odious Debt: Some Considerations Vikram Nehru Mark Thomas 205

10 Odious Debt as a Principal-Agent Problem Frederico Gil Sander 229

11 The Economics of Odious Debt Dörte Dömeland Frederico Gil Sander Carlos A. Primo Braga 261

Part IV Debt Management 293

12 Government Debt Management in Low-Income Countries Philip Anderson Eriko Togo 295

13 Debut Sovereign Bond Issues:Strategic Considerations and Determinants of Characteristics Udaibir S. Das Michael G. Papaioannou Magdalena Polan 313

14 Subnational Debt Management by Low-Income Countries in Transition to Market Access Lili Liu Abha Prasad Francis Rowe Signe Zeikate 343

15 Managing Volatility: Fiscal Policy, Debt Management, and Oil Revenues in the Republic of Congo Nina Budina Sweder Van Wijnbergen Ying Li 373

16 Debt-Swap Mechanisms Revisited: Lessons from the Chilean Experience of the 1980s Leonardo Hernández 405

Index 427

Boxes

1.1 The Paris Club 12

1.2 Key Features of the HIPC Initiative 26

1.3 Key Features of the Multilateral Debt Relief Initiative 29

8.1 What Factors Affect a Country's Level of Debt? 185

9.1 The Stolen Assets Recovery (StAR) Initiative 218

11.1 Noga vs. the Russian Federation 270

12.1 Principles of Sound Practice in public Debt Management 300

12.2 Steps in Establishing an Effective MTDS 307

13.1 IMF policy on Nonconcessional External Debt Financing to HIPCs 318

13.2 Determinants of the Size and Cost of Debut Bond Issues 322

14.1 Autonomy and Regulation in Issuing Subnational Debt in India 361

Figures

1.1 Debt Stock of post-Decision Point HIPCs at Different Stages of Debt Relief 30

2.1 Average Educational Variables in HIPCs at Each Stage of the HIPC Initiative Process 40

2.2 Primary School Dropout Rates in Post-Completion Point HIPCs before and after Reaching the Completion Point 41

2.3 Secondary School Repetition Rates in Post-Completion Point HIPCs before and after Reaching the Completion Point 42

2.4 Distribution of Education Expenditures in Pre-Decision Point, Interim, and Post-Completion Point HIPCs 43

2.5 Composition of Expenditures on Primary, Secondary, and Tertiary Education in HIPCs as a Percentage of Total Education Expenditures: Empirical Distribution Functions 44

3.1 Median Births Attended by Skilled Health Staff in Low-Income Countries at Different Stages of the HIPC Initiative, 1995-2000 and 2003-07 53

3.2 Median Immunization Coverage of DPT in Low-Income Countries around Decision Point at Different Stages of the HIPC Initiative 54

3.3 Median Access to Improved Sanitation Facilities in Rural Areas in Low-Income Countries at Different Stages of the HIPC Initiative, 1995, 2000, and 2006 54

3.4 Infant Mortality Rates in Low-Income Countries at Different Stages of the HIPC Initiative 57