Heavily indebted poor countries initiative (HIPC), debt relief, economic stability and economic growth in Africa

Stabilization seeks to achieve internal and external equilibrium that is, to control the demand side of the economy, with the purpose of reducing size of government, inflation and quickly achieving a sustainable balance of payment position. In this paper, I investigated the impacts of HIPC initiativ...

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Bibliographic Details
Published inEconomic change and restructuring Vol. 52; no. 2; pp. 89 - 121
Main Author Henri, Atangana Ondoa
Format Journal Article
LanguageEnglish
Published New York Springer US 01.05.2019
Springer Nature B.V
Subjects
Corruption
Debt cancellation
Development Economics
Economic Growth
Economic performance
Economic Policy
Economic stabilization
Economics
Economics and Finance
External debt
Governance
Inflation
Insurance
International Economics
Macroeconomics/Monetary Economics//Financial Economics
Political Economy/Economic Systems
Stabilization
Trade agreements
Africa
Debt relief
HIPC
Economic stability and economic growth
Africa
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Summary:Stabilization seeks to achieve internal and external equilibrium that is, to control the demand side of the economy, with the purpose of reducing size of government, inflation and quickly achieving a sustainable balance of payment position. In this paper, I investigated the impacts of HIPC initiative and debt relief on economic growth and economic stability in Africa. I also identify the determinants of economic performance using the World Bank data for the period 1990–2015 with 5-year panels. The results show that this initiative causes economic instability in Africa. The results also indicate that the long run effect of debt relief on economic growth is positive but in the short run debt relief has no significant effect on GDP per capita growth. However, in both the short run and the long run, debt relief reduces external balance on goods and services deficit and has no effect on inflation. The main determinants of economic performance in Africa are control of corruption, political stability, regulatory quality and education. In this perspective, governments of African countries should promote good governance, educate their population and revise trade agreements to provide insurance for economic growth and economic stability.
ISSN:1573-9414
1574-0277
DOI:10.1007/s10644-017-9218-1