() and Philipp J.H. Schröder
Christian Bjørnskov: Department of Economics, Aarhus School of Business, Postal: Department of Economics, Frichshuset Hermodsvej 22, 8230 Åbyhøj, Denmark
Philipp J.H. Schröder: Department of Economics, Aarhus School of Business, Postal: Department of Economics, Frichshuset Hermodsvej 22, 8230 Åbyhøj, Denmark
Abstract: This paper investigates the effects of inflows of foreign aid on the debt repayment behaviour of developing countries. The paper first delineates the overall incentives to committing to timely repayment in a war of attrition-type model. A set of panel estimates including 93 developing countries shows that foreign aid is strongly negatively associated with repayment incentives. The findings pertain to both total debt service and service on publically guaranteed debt. Only countries that tend to vote predominantly with the US in the UN General Assembly are not significantly discouraged from servicing their debt by inflows of foreign aid.
48 pages, November 24, 2010
Full text files
Questions (including download problems) about the papers in this series should be directed to Helle Vinbaek Stenholt ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2018-01-23 23:30:49.