The Impact of External Indebtednesson Poverty in Low-Income Countries

Author/Editor:

Kadima D. Kalonji ; Boileau Loko ; Raj Nallari ; Montfort Mlachila

Publication Date:

March 1, 2003

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper explores the relationship between external debt and poverty. A number of observers have argued that high external indebtedness is a major cause of poverty. Using the first-differenced general method of moments (GMM) estimator, the paper models the impact of external debt on poverty, measured by life expectancy, infant mortality, and gross primary enrollment rates, while duly taking into account the impact of external debt on income. The paper thus endeavors to bring together the literature that links external debt with income growth and poverty. The main conclusion is that once the effect of income on poverty has been taken into account, external indebtedness indicators have a limited but important impact on poverty.

Series:

Working Paper No. 03/61

Subject:

English

Publication Date:

March 1, 2003

ISBN/ISSN:

9781451848199/1018-5941

Stock No:

WPIEA0612003

Format:

Paper

Pages:

26

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