AID EFFECTIVENESS AND ECONOMIC PERFORMANCE: EVIDENCE FROM DEBT RELIEF INITIATIVES IN CEMAC COUNTRIES

Details

Supervisors

Romain Houssa

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale, à finalité spécialisée

Abstract

enThis study examines the conditions under which debt relief initiatives have improved economic performance in CEMAC countries and investigates why their effects have remained limited or unsustainable. The study focuses on three debt relief initiatives (HIPC, MDRI, and DSSI). We collected data from 1990 to 2024, and we use three methods to answer the research question: The fixed effects regressions, Generalized Synthetic Control and Difference in Differences. We find that debt relief created some fiscal space by reducing external debt and in some specifications debt-service pressure. However, these gains did not translate into higher investment or sustained growth. The evidence on GDP growth is weaker and not consistently confirmed across methods and due to data constraints, we did not test the role of domestic debt re-accumulation directly. Overall, the results suggest that the limited effectiveness of debt relief in CEMAC countries is explained by the weak transmission from debt reduction and lower debt-service pressure to productive investment and sustained growth, while institutional quality and commodity dependence remain plausible but only suggestive mechanisms.