TY - BOOK ID - 134298609 TI - Does IDA Engage in Defensive Lending ? AU - Geginat, Carolin AU - Kraay, Aart PY - 2007 PB - Washington, D.C., The World Bank, DB - UniCat KW - Access to Finance KW - Bankruptcy and Resolution of Financial Distress KW - Banks and Banking Reform KW - Creditors KW - Debt KW - Debt issues KW - Debt Markets KW - Debts KW - Disbursements KW - Economic Theory and Research KW - External debt KW - Finance and Financial Sector Development KW - International Bank KW - International Development KW - Macroeconomics and Economic Growth KW - Non-performing loans KW - Repayments UR - https://www.unicat.be/uniCat?func=search&query=sysid:134298609 AB - Multilateral development banks are frequently accused of "defensive lending," the practice of extending new loans purely in order to ensure that existing loans are repaid. This paper empirically examine this hypothesis using data on lending by and repayments to the International Development Association (IDA), which is the largest provider of concessional development loans to low-income countries. The authors argue that key institutional features of IDA both (i) potentially create incentives for defensive lending, and (ii) enable particularly sharp tests of the defensive lending hypothesis. The authors find that there is a surprisingly robust partial correlation between disbursements on new IDA loans and repayments on existing loans. However, a closer look at the evidence suggests that defensive lending is unlikely to be a major explanation for this partial correlation. ER -