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Investment of public funds --- Privately placed securities

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This paper examines the channels through which external debt affects growth in low-income countries. Our results suggest that the substantial reduction in the stock of external debt projected for highly indebted poor countries (HIPCs) would directly increase per capita income growth by about 1 percentage point per annum. Reductions in external debt service could also provide an indirect boost to growth through their effects on public investment. If half of all debt-service relief were channeled for such purposes without increasing the budget deficit, then growth could accelerate in some HIPCs by an additional 0.5 percentage point per annum.

Debts, External --- Public investments --- Developing countries --- Economic conditions. --- Government investments --- Investments, Public --- Expenditures, Public --- Investments --- Capital budget --- Economic development projects --- Investment of public funds --- Finance --- Exports and Imports --- Public Finance --- International Lending and Debt Problems --- Economic Growth and Aggregate Productivity: General --- National Government Expenditures and Related Policies: Infrastructures --- Other Public Investment and Capital Stock --- Debt --- Debt Management --- Sovereign Debt --- International economics --- Public finance & taxation --- Public investment spending --- Debt service --- External debt --- Debt burden --- Public debt --- Debts, Public