Does Debt Relief Improve Child Health? : Evidence from Cross-Country Micro Data
This paper analyzes the effects of a multilateral debt relief program on child health. The International Monetary Fund and the World Bank launched the Heavily Indebted Poor Countries Initiative in the late 1990s to reduce the debt burdens of poor c...
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| Language: | English en_US |
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World Bank, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/2016/10/26884745/debt-relief-improve-child-health-evidence-cross-country-micro-data http://hdl.handle.net/10986/25316 |
| Summary: | This paper analyzes the effects of a
multilateral debt relief program on child health. The
International Monetary Fund and the World Bank launched the
Heavily Indebted Poor Countries Initiative in the late 1990s
to reduce the debt burdens of poor countries, and explicitly
linked the initiative to the aim of poverty reduction and
social targets. As a result, debt-servicing costs have gone
down by an average 1.8 percentage points of gross domestic
product in Heavily Indebted Poor Countries. However, the
social effects of debt relief are not well known. The paper
employs micro data on infant mortality from 56
country-specific Demographic and Health Surveys to
investigate the effects of the Heavily Indebted Poor
Countries Initiative on child health. The retrospective
fertility structure of the data allows for analysis using
the within-mother variation in the probability of survival
of babies before and after different stages of the
initiative. The results suggest that after a debt-ridden
country enters the program, which is conditional on reform
and pro-development policies, and receives interim debt
relief, the probability of infant mortality goes down by
about 0.5 percentage point. This translates into about 3,000
fewer infant deaths in an average Heavily Indebted Poor
Country. The findings are particularly strong for infants
born to poor mothers and mothers living in rural areas, and
are driven by access to vaccines early in life and during
pregnancy. There are no child health effects from graduating
from the program and receiving full debt relief. |
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