Location of Repository

The Politics of External Debt in Developing Countries

By Emilio Colombo

Abstract

We analyse the determinants of long term external debt for a large sample of developing countries. We ¯nd that, in addition to the stan- dard economic variables, institutional and socio-political variables are a key factor in explaining the level of external debt. Overall the re- sults point to an interpretation based on the presence of binding credit constraints. Such constraints are relaxed in the presence of high qual- ity of institutions and low political risk, while they are tightened when socio-political risk is higher.

OAI identifier:

Suggested articles

Preview

Citations

  1. (1989). A Constant Recontracting Model of Sovereign Debt,"
  2. (2003). Debt Intolerance," Brookings Papers on Economic Activity,
  3. (1981). Debt With Potential Repudiation: Theory and Estimation," Review of Economic Studies,
  4. (1999). Exchange Rates and Financial Fragility," Working Paper N.7418,
  5. (1991). External Debt and Political Instability," Working paper N.3772,
  6. (1998). In°ation Crises and Long Run Growth,"
  7. (1998). Initial conditions and moment restrictions in dynamic panel data models,"
  8. (1993). Moderate In°ation," The World Bank Economic Review,
  9. (1990). North-South Lending and Endogenous Domestic Capital Market Ine±ciencies,"
  10. NorthSouth Lending with Moral Hazard and Repudiation Risk,"
  11. (2004). Perspectives on Long-Term External Debt," Topics in Macroeconomics,
  12. (2002). Polcon dataset: a new measure of political commitment,"
  13. (2009). Political institutions and debt crises," Public Choice,
  14. (2009). Rules of thumb for sovereign debt crises,"
  15. (2008). Sovereign Debt Crises and Credit to the Private Sector,"
  16. (1995). Sovereign Debt,"
  17. (2009). The Economics and Law of Sovereign Debt and Default,"
  18. The Modern History of Exchange Rate Arrangements: A Reinterpretation,"
  19. (2005). The Mystery of Original Sin,"
  20. (1999). Why Do Some Countries Produce So Much More Output Per Worker Than Others?,"
  21. (1990). Why Doesn't Capital Flow from Rich to Poor Countries," American Economic Review,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.