Sovereign Borrowing by Developing Countries : What Determines Market Access?

Author/Editor:

R. G Gelos ; Guido M Sandleris ; Ratna Sahay

Publication Date:

November 1, 2004

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:

What determines the ability of governments from developing countries to access international credit markets? We examine this question using detailed data on sovereign bond issuances and public syndicated bank loans since 1982. We find that traditional measures of a country’s links with the rest of the world (such as trade openness) and traditional liquidity and macroeconomic indicators do not help much in explaining market access. However, a country’s vulnerability to shocks and the perceived quality of its policies and institutions appear to be important determinants of its government’s ability to tap the markets. We are unable to detect strong punishment of defaulting countries by credit markets.

Series:

Working Paper No. 04/221

Subject:

English

Publication Date:

November 1, 2004

ISBN/ISSN:

9781451875263/1018-5941

Stock No:

WPIEA2212004

Format:

Paper

Pages:

42

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