OECD Development Centre Working Papers

The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.

English, French

The HIPC Initiative

True and False Promises

The paper develops the view that the perspective on the HIPC initiative is distorted by the fact that -contrary to the Brady deal itself- it lacks all perspective on the “market value” of the debt which is written down. The appropriate “market value” is one that takes account of the risk of non-payment: arrears, rescheduling and “constrained” refinancing of various sorts. Building upon econometric evidence that relies on middle income debtors in the eighties, the paper argues that the initiative is about ten times less generous than face value accounting would suggest ...


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