A Constrained Choice? Impact of Concessionality Requirements on Borrowing Behavior
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Summary:
This paper uses the propensity matching score approach to assess the impact of the IMF’s debt limits policy (DLP) on borrowing behavior in countries eligible to borrow from its concessional lending window. The paper finds that countries under the DLP borrow significantly higher amounts of concessional resources. However, there is no evidence that the DLP significantly impacts the level of non-concessional borrowing nor the terms of such borrowing. This result is confirmed by the heterogeneity analysis, suggesting that the level of development, rather than concessionality requirements, is the key driver of non-concessional borrowing.
Series:
Working Paper No. 2014/176
Subject:
English
Publication Date:
September 24, 2014
ISBN/ISSN:
9781498349727/1018-5941
Stock No:
WPIEA2014176
Pages:
41
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