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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Debt relief and credit to the private sector in African countries
Authors:Harrabi, SanaISNI
Bousrih, LobnaISNI
Salisu, MohammedISNI
Periodical:African Development Review
Geographic term:Africa
Subjects:debt relief
financial policy
private sector
History and Exploration
Economics and Trade
Development and Technology
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1467-8268.2007.00171.x/pdf
Abstract:The purpose of this paper is to empirically investigate the link between debt relief and credit to the private sector in African countries using a panel method over the period 1988-2004. The motivation for investigating the relationship between debt relief and credit to the private sector follows J. Christensen's (2004) hypothesis that domestic debt has a negative impact on the credit to the private sector; therefore debt relief is expected to alleviate domestic debt and thereby create space for domestic credit which, if it is mostly constituted of public sector credit, crowds out credit to the private sector. The paper concludes that debt relief has a significant and positive effect on credit to the private sector in the short term. In the long term, debt relief has positive effects on domestic credit to the private sector only when associated with good initial institutional quality. Bibliogr., notes, ref., sum. [Journal abstract]