Debt relief evaluation: what is the impact of debt relief?

This event discussed the results of an evaluation for the Policy and Operations Evaluation Department of the Netherlands' Ministry of Foreign Affairs.

Not many studies have been carried out on the effectiveness of debt relief. It is often assumed that debt relief will release resources for governments so that they can spend more on, for example, education and health. The results of this extensive study (eight country studies, a literature survey and an econometric study) show that the efficiency, effectiveness and relevance of international debt relief given during the 1990s - for achieving economic growth and poverty reduction - was limited. The amounts of debt relief were too small, debt relief was given in the wrong modalities and it was accompanied by too many new loans. In addition, the policy conditionality attached to debt relief was not effective and may even have had adverse effects. Although the enhanced HIPC initiative that began in 1999 implies some improvements, it leaves many important issues unresolved.