IMPACT OF DEBT-RELIEF (HIPC INITIATIVE) ON INVESTMENT IN SUB-SAHARAN AFRICA

서지정보

· 발행기관 : 국제개발협력학회
· 수록지 정보 : 국제개발협력연구 / 8권 / 1호 / 67 ~ 105페이지
· 저자명 : Frank Mashodo, 이계우

초록

This paper assesses the impact of debt-relief under the Heavily Indebted Poor-Countries (HIPC) Initiative on investment in Sub-Saharan Africa (SSA) and tests whether the debt overhang hypothesis or the fiscal space theory explains the case better. For this purpose, the difference-in-differences model was applied to a panel data of 17 SSA countries, including 8 countries that received debt relief (HIPC) from 2003 to 2005 and 9 non-HIPCs in SSA, covering the period 1996–2013.
The results indicate that the HIPC Initiative had significant positive impacts on total investment in the region. Moreover, this increase in total investment in SSA was mainly driven by private investment, which must have responded positively to debt-relief and benefited from the improved governance and macroeconomic stability brought by the beneficiary government’s implementation of the specific policies and programs set in the HIPC Initiative conditions. There was little evidence to support the claim that the HIPC Initiative has significant impacts --on public investment. Therefore, the results supported the debt overhang hypothesis more than the fiscal space theory in SSA. Policy implications are self-evident. Both donor and developing countries should ensure _that debt reduction and foreign aid are used to encourage the private sector’s economic activities and improve institutions, governance, and macroeconomic environment for doing-business easily and competitively.

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