The IMF-WB Debt Sustainability Framework: procedures, applications and criticisms

At the completion of the Heavily Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI), eligible countries’ public debt sustainability was restored. In view of large development needs (and limited tax revenues), it is only rational that former HIPCs accumulate new debt. To monitor the debt sustainability of low-income countries (LICs) over the longer term, the World Bank and IMF jointly developed the Debt Sustainability Framework (DSF). In this policy brief we explain how the DSF works, discuss the different creditor policies the output of the DSF informs, and highlight a number of critiques on the framework. (Download).

D. Cassimon